Amazon, Berkshire Hathaway, and JP Morgan Chase have agreed to jointly create an independent company aimed at reducing medical costs for their over 1 million employees, but it appears that they may overlook easy proven tactics for achieving this goal, says public interest law professor John Banzhaf, who has saved billions of dollars in medical costs.
A spokesman says they plan to bring technology tools to bear on making health care more transparent, affordable, and simple, but only using technology to tinker around the edges, and making care for diseases somewhat less expensive, will ignore the major underlying problem, says Banzhaf.
Even using technology to lower the cost of treating major medical conditions such as heart attacks, cancer, strokes, diabetes, etc. cannot overcome the simple undeniable fact that treating these and other very serious diseases will always be expensive, and that it is much more effective for companies to prevent these diseases from occurring n the first place rather than simply improving the treatment for them once they occur.
For example, a courtroom trial in which the law professor participated – in which all sides were able to present their evidence, and cross examine the evidence submitted by others – showed that each and every employee who smokes can cost his employer over $12,000 per year; money which could otherwise be used to provide more and better health insurance for the great majority of workers who do not smoke.
On a national scale, the American Lung association estimates that smoking costs the American economy about $322 billion a year. This includes over $175 billion in direct medical care for adults, but does not include the increased indirect costs such as higher percentages of complications from surgery, delayed healing, etc. Nonsmokers must now bear those costs in higher taxes and in inflated health insurance costs.
The National Association of Insurance Commissioners estimated many years ago that 60% to 80% of all health costs are caused by things over which individuals have control. Therefore, at Prof. Banzhaf’s urging, it recommended that people who smoke should be asked to assume some measure of personal responsibility by paying more for their health insurance.
Study after study have proven that one of the most effective ways to help smokers quit – and thereby save countless dollars in unnecessary health care expenses – is to provide a strong financial incentive.
Higher taxes on cigarettes are a major factor in helping smokers to quit, and to do so at less than zero cost to taxpayers, since higher taxes increase revenue even after allowing for those who quit.
Another form of financial incentive is now in effect as a result of two legal actions brought by Banzhaf. Under it, smokers often must pay more for their health insurance, just as they have long paid more for life insurance, and in some cases more for fire and/or automobile insurance also.
One version, championed before Congress by Banzhaf, is a 50% surcharge on what smokers have to pay for health insurance under Obamacare. Millions have reportedly quit as a result, and others are at least being forced to assume some personal responsible for the expenses they now impose on others.
Another even more effective step these companies and others can use to save billions is to simply announce that they will not longer hire – or in some cases employ – smokers, says Banzhaf.