Wisdom of People: The Key to Reducing Health Costs

No one in the world, as far as I know, has ever lost money by underestimating the intelligence of the great masses of plain people.

H. L. Mencken (1880-1956),  Social Critic known at the Sage of Baltimore

Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies, and Nations.

James Surowiecke (born 1967), American journalist, in  subtitle to The Wisdom of Crowds, Doubleday (2004)

April 21, 2012 -  I harbor this belief.  It defies conventional political wisdom.  I believe the great masses of people – be they employers, employees, those in the streets, and in their houses – are wiser than politicians and even doctors when it comes to their health.

People know what is good and bad for their health.  People know good care from bad care.  People know a good medical deal from a bad medical deal.  People know that what people do outside doctors’ offices, where they spend 99.99% of their time, is more important to their health than what happens inside those offices.  People know,  as my doctor told me, “It is not what I can do for you, but what you can do for yourself.” The exception, of course, is when you are sick. That’s where doctor skills and knowledge come into play.

People  instinctively know these elemental  things. So do employers. That ‘s  why people-driven care, aka consumer-driven care, is taking off in the workplace. A Towers Watson and National Business Group survey indicates 59% of companies with over 1000 employees are now  offering health savings accounts with high deductibles, or equivalent plans, to employees,  either as stand-alone plans or as a choice between HSAs and PPOs.

Savings accounts jumped 35% in 2011.  People are wise. Employers are wise .   Both know these accounts save 15% in health costs, and premiums are lower, sometimes 30%- 50%  lower.  People know when it comes to spending their own money, they make wiser more prudent choices.  People know the money they spend on these new account plans is tax-free.   They know this tax-free money rolls over into the next year and serves as retirement money. They know out-of-pocket responsibility leads to wiser and more careful spending of health dollars. And they know what they pay for and  do,  for and to themselves,  is the single most critical factor contributing  to their physical and economic  well-being.

Tweet:  Employers offering health-savings accounts with high deductibles,  and their various equivalents, increased by 35% in 2011.