Healthcare In 2010-18: More Americans Insured, Even More Having “Wallet Biopsies”

By 2010, nearly 50 million Americans were uninsured, despite the fact that 17% of the economy was (and is) spent on healthcare. The U.S. has easily become the world’s greatest spender, in both per capita and absolute terms, on healthcare.  However, according to the World Health Organization, the U.S. healthcare system is ranked 37th globally in terms of outcomes.  As a nation, we underperform in such basic measures as life expectancy and neonatal mortality.  Incidentally, despite a still increasing healthcare spend, U.S. life expectancy has actually decreased in the U.S. for the past two consecutive years where data is available (2015 & 2016), the first such downturn in two decades.

     Against this backdrop, the Patient Protection and Affordable Care Act, often shortened to the Affordable Care Act (ACA), or even better known as Obamacare, became law in 2010.  It contains some very reformist provisions, including some that took effect right away:

  • Insurance plans could no longer deny coverage of preexisting conditions in children. People who were uninsured because of preexisting conditions could get insurance through a temporary high-risk pool;
  • Insurance providers could no longer place a lifetime limit on payouts;
  • All existing health plans and any new ones were required to cover dependent children until age 26. 

Several additional changes were slated to take effect in 2014, including:

  • Most Americans would be required to have a minimum level of health insurance or pay a penalty (AKA the Individual Mandate);
  • States would have until 2014 to create health insurance exchanges that would be open to people who did not have coverage through their jobs and to employers with 100 or fewer workers;
  • Eligibility requirements for Medicaid would be revised to cover anyone earning less than 133 percent of the poverty level, eventually resulting in an estimated 16 million new beneficiaries.
  • Businesses with 50 or more workers would be assessed a penalty starting in 2014 if they did not offer benefits and if any of their workers bought subsidized coverage through the new exchanges.

Physicians also became subject to a new model. In 2015, President Obama signed into law the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), changing the healthcare financing system in the most significant and far reaching way since the Program’s inception in 1965.

MACRA repealed the flawed Sustainable Growth Rate (SGR) payment system which governed how physicians and other clinicians were paid under Part B of the Medicare program. It replaced the SGR, and its fee-for-service (FFS) reimbursement model, with a new two-track system that requires physicians and clinicians to accept downside risk: Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs). Physicians would now have their payment amounts modified up or down by such measures as patient satisfaction, the provision of preventive care, and the ability to provide good outcomes.  On the 9th attempt, a U.S. President finally made substantive reform to the healthcare system.

As you would imagine, many of these changes were controversial, and in 2017 Donald Trump assumed the Presidency with one of his key objectives being to “repeal and replace Obamacare”. By late 2018, most of the ACA provisions remained in place, although the President was successful in rolling back the Individual Mandate, which in 2020 will no longer be enforced.

By 2018, things have not gotten much better. Annual premiums for employer-provided health insurance hit an average of $19,616 for a family this year, a rise of 5 percent over 2017, according to a new survey by the Kaiser Family Foundation. Employees paid an average of $5,547 for their coverage, with employers covering the rest.

The average premium for family coverage has risen 55 percent since 2008 — about twice as fast as wages, which are up 26 percent, and three times as fast as inflation, up 17 percent over a decade.  Among workers who have a deductible — about 85 percent of insured workers — the average deductible amount has risen to $1,573, a 212 percent increase since 2008. Deductibles have risen eight times faster than wages over the last 10 years.  According to Milliman, in the last 5 years alone, employer cost has gone up 22%, and additional cost has been shifted to employees, who have seen their premiums go up 38% in the same time period.


What the future holds is still quite uncertain, but what is clear that that the path we have been on for much of the past 75 years is not sustainable.




Further Reading:


Why Amazon, JP Morgan Chase, Berkshire Hathaway, Uber and Others Are Entering Healthcare

Why Amazon, JP Morgan Chase, Berkshire Hathaway, Uber and Others Are Entering Healthcare

When you undergo medical training, you learn a great deal of arcane facts and quotes.  One of the most unusual is “Sutton’s Law”. It pertains to William Francis Sutton, a notorious bank robber of the 1920’s, who when asked why he robbed banks, allegedly replied simply, “Because that’s where the money is”.  It is used in medicine to remind us to go straight to the most likely diagnosis.


What does this have to do with companies like Amazon and Uber going into healthcare? Well, the healthcare sector is now the #1 employer in the U.S.  Healthcare costs are also projected to consume 30% of the federal budget by 2020, as I have previously noted (  So, for-profit companies are moving into healthcare for exactly the reason Willie Sutton robbed banks – that is where the money is.


For the Amazon/JP Morgan/Warren Buffet-Berkshire collaboration, the initial focus in more about saving money rather than making it. The plan is to initially focus on coming up with solutions to improve the care of their own employees.  This is a lot of people – their combined workforce exceeds 1.1 million. If they are successful, their solutions developed could be scaled up and offered to the public at large.  While not everyone believes these companies can pull off big change, current healthcare stock prices fell at the announcement, so at least Wall Street is taking the move seriously.


Uber is taking a different approach.  It recognized that some of the highest-cost patients often have obstacles to keeping regular physician appointments, resulting in more ER visits and hospitalizations. One of those obstacles is transportation, with 3.6 million Americans missing medical appointments due to a lack of available, reliable transportation.  Uber Health will provide a ride-hailing platform available specifically to healthcare providers, letting clinics, hospitals, and others easily find rides for their patients from a central source – without requiring that the rider even have the Uber app, or a smartphone.  Uber is betting that insurers, as well as hospitals and doctors who have taken on risk related to the total cost of patient care, will be willing to bear the relatively modest cost of providing convenient transportation in the hopes of reducing far more expensive episodes of healthcare utilization. My guess is that their bet will pay off, and organizations using its services will see an uptick in patient compliance and a decrease in costs sufficient to warrant the modest investment.


While Amazon, JP Morgan Chase, Berkshire Hathaway, Uber are making headlines in 2018, I would predict that we will see more of this trend in the future.  Many companies that run a wire into your home, such as cable companies and telephone companies, have long been quietly exploring how that can get a piece of the home care pie, and odds are you already have a wearable device or smartphone app that pertains to your diet or activity.  Look for more of these kinds of headlines in the future.

Further reading:


Where the Jobs Are: Healthcare

In 2000, there were 7 million more workers in manufacturing than in health care. At the beginning of the Great Recession, there were 2.4 million more workers in retail than health care. In 2017, health care surpassed both.  The healthcare industry is now the largest U.S. employer. Much of the growth is not in roles that provide patient care – administrative jobs are growing at the fastest pace. Let’s look at the numbers generated by CareerBuilder, growth is represented by number of new jobs since 2007:


No. 1 — Home health aides: 46 percent growth (296,952 more jobs)

No. 2 — Physical therapist assistants: 34 percent growth (22,275 more jobs)

No. 3 — Nurse practitioners: 32 percent growth (38,563 more jobs)

No. 4 — Health technologists and technicians, all other: 30 percent growth (30,583 more jobs)

No. 5 — Genetic counselors: 31 percent growth (709 more jobs)

No. 6 — Hearing aid specialists: 28 percent growth (1,582 more jobs)

No. 7 (tie) — Mental health counselors: 27 percent growth (34,996 more jobs)

No. 7 (tie) — Physical therapists: 27 percent growth (49,202 more jobs)

No. 9 — Healthcare social workers: 26 percent growth (35,980 more jobs)

No. 10 — Medical secretaries: 20 percent (95,649 more jobs)

No. 11 — Registered nurses: 16 percent (397,315 more jobs)

No. 12 — Nursing assistants: 12 percent (163,770 more jobs)


This growth is not all necessarily good news, though.  About a quarter of all U.S. healthcare spending is in administrative costs rather than the direct provision of care, and those new jobs, and their associated costs, are passed on to those paying the bills, including the patient.  Hospitals are expanding their payrolls, and labor already comprises over half the cost of a hospitalization. As the trend toward outpatient care continues, the pressure to fill those empty beds will be even more enormous than it is now.  In many communities, the local hospital is the biggest employer, and layoffs have significant political consequences that ripple through a community. Lastly, while many healthcare jobs pay well, the largest growth is in one of the lowest-skilled and paid jobs -home health aides.


For some communities, the growth is healthcare jobs is a boon.  Nevertheless, for the nation, we may just be painting ourselves into an economic corner.


Further reading:


When to Think About Finding a New Doctor

Though people change doctors more often these days, in many cases it is due to a change in insurance plans and the need to find someone “in network”.  Most Americans are distrustful of the healthcare system, but more than two-thirds of the public (69%) rate the honesty and ethical standards of physicians as a group as “very high” or “high” (Gallup 2013).  We don’t like the system, probably don’t trust the leadership, but we have faith in our docs. Nevertheless, there are some warning signs that it may be time to move on from your doctor.  Here are some that relate to the level of customer service, and some that involve health risks:


  1. Your doctor is nearly impossible to reach:  Routine questions or messages left at the office should be returned in 1-2 business days, and without your having to make multiple calls.  Your doctor may not call you back, depending on the issue, but a member of the staff, who has discussed the question with the doctor, should.  It should not take multiple tries on your part to get a reply. If it does, it suggests that the practice doesn’t have good systems in place, and that they may miss something crucial.


If it is after hours and you have an urgent problem, someone in your doctor’s practice, if not the doctor herself, should be on call.  Any calls left with an answering service should be returned in 2-3 hours at most, unless the doctor is in the middle of a surgical procedure of some other emergency.  If you have left messages on more than one occasion with the answering service and never heard back, it is probably time to look elsewhere.


  1. You rarely are told about your test results: It seems every medical practice has their own system of sharing test results.  Sometimes a staff member calls, sometimes the results are released electronically through a patient portal, or you might get an email or text if you opted in.  No matter how results are shared, it should be clear to you how and when it will happen. Unless your doctor is ordering a rare or unusual test, your results should be available in 3-4 business days at most, and you should hear about results in 4-5 days.  Urgent or very serious results are often shared within 24-36 hours. If you never hear about results, or it takes you multiple attempts to get an answer, it is a sign your doctor’s practice might not have adequate systems in place to ensure your safety and stay organized.


  1. You find yourself waiting for the doctor for a long time at each visit, many of your appointments are canceled at the last minute:  We all wait in the doctor’s office, even other doctors.  Very often it is because a patient has an unexpected finding or issue, and the doctor needs to take more time than planned.  Any of us who are getting bad news would want the doctor to take his or her time and not rush out to the next patient, so the occasional long wait is understandable. However, if you always wait more than an hour, or worse yet, find that many appointments are canceled at the last minute (less than a couple of days before), it is a sign that the doctor’s practice may be trying to see more patients than they can safely handle.  If your involuntarily scheduled reappointment is more than a month away, you can be sure the office is overwhelmed. In some cases, especially if you are seeing a specialist, it may be that there aren’t enough of that type of doctor in your area and they are doing their best, so ask your primary care provider if you have other options.


  1. You just don’t feel comfortable:  Maybe you feel like the doctor doesn’t listen to you, or the staff is rude or dismissive.  Maybe you just don’t feel like you “connect”. Whatever the reason, the doctor’s practice is the place where you turn if you have a very serious problem.  You are entitled to both consideration and compassion. Even if you are healthy, if you just don’t have good feelings about your doctor or his office, move on.  Healing relationships between doctor and patient are based on mutual trust, and if you are not feeling that, you owe it to yourself to find someone who gives you confidence.


It isn’t easy to make the decision to find a new doctor, but the issues covered here are signs that you may not be in the right hands, or the safest ones.  If you experience one or more of these problems, I would suggest you start looking elsewhere.

Further reading:


What Screening Tests and Treatments You Need as You Age

As we get older, we are more likely to develop chronic medical issues like high blood pressure or high cholesterol, and many of these conditions have no symptoms, so screening is important. The U.S. Preventive Services Task Force (USPSTF) has been charged with developing a list of screening and intervention items that have proven effective and should be considered by all older adults.  While your doctor is aware of these, you should know about them too, especially if you have many doctors or are forced to change doctors frequently. This will help you make sure nothing important, and potentially life-saving, falls through the cracks.

The following are among the most important screenings recommended by the USPSTF and covered by Medicare:

  • High blood pressure
    • Who: All older adults
    • How often: Yearly for people aged 40 or older. Covered as part of Medicare Annual Wellness Visit.
  • High cholesterol
    • Who: All men age 35 or older; women aged 45 or older if they are “at increased risk for coronary heart disease.”
    • How often: Per the USPSTF, about every 5 years; adjust based on previous results. Medicare covers cholesterol tests every 5 years as part of preventive care.

Obesity (measurement of body-mass index)

  • Who: all adults
  • How often: Not specified by the USPSTF. Covered yearly as part of Medicare Annual Wellness Visit.

Abnormal blood glucose and Type 2 Diabetes

  • Who: Per the USPSTF, screening is recommended for adults aged 40-70 who are obese. Medicare covers screening for people with one or more risk factors, and doesn’t specify an age range.
  • How often: About every three years, per the USPSTF. Covered every 12 months by Medicare, for people with risk factors.

Hepatitis C

  • Who: The USPSTF recommends a one-time screening for all adults born between 1945 and 1965.
  • How often: Covered at least once by Medicare for adults born during the years above. May be covered more often for those with additional risk factors for hepatitis C infection.

HIV (Human immunodeficiency virus)

  • Who: Adults aged 15-65, and older adults at increased risk for infection
  • How often: Not specified by the USPSTF. Covered annually by Medicare.

Colorectal cancer

  • Who: The USPSTF recommends for routine colon cancer screening for adults aged 50-75, and against colon cancer screening in adults aged 85 or older. For adults aged 76-85, the USPSTF recommends against “routine screening”; the CDC’s screening guidelines recommend an “individualized decision” for adults aged 75 or older.
  • How often: This depends on the screening method used. Screening colonoscopy can be done every 10 years, whereas screening by checking stool for microscopic blood requires annual stool testing.

Breast cancer

  • Who: The USPSTF recommends for routine breast cancer screening in women aged 50-74. The USPSTF recommends neither for nor against breast cancer screening in women aged 75 or older.
  • How often: The USPSTF recommends screening mammography every two years. Medicare covers screening mammograms every 12 months.

Lung cancer

  • Who: Per the USPSTF, adults who are age 55-80, have a 30 pack-year history of smoking, and either smoke or have quit within the past 15 years.
  • How often: The USPSTF recommends yearly screening for the adults meeting the criteria above, and stopping screening once it’s been 15 years since the person quit smoking. 


So, you thought you only needed your “shots” as a kid?  Think again—-everything seems to come full circle. Vaccines recommended as we age:

Influenza (flu) vaccine

  • Who: The CDC recommends vaccination for seasonal influenza every year, for everyone aged 6 months or older. There is no upper age limit. A high-dose influenza vaccine (Fluzone) is approved for adults aged 65+, and may be better at stimulating an aging immune system.

Pneumococcal vaccination (two types as of 2014)

  • Who: All adults aged 65+ should get both Prevnar (PCV13) and Pneumovax (PPSV23).
  • How often: Once for each, after age 65. The CDC recommends revaccinating high-risk patients who received Pneumovax prior to age 65, once it’s been five years since Pneumovax was first administered.

Shingles (herpes zoster) vaccine

  • Who: The CDC recommends vaccination against shingles for all adults aged 60+. The only approved vaccine is Zostavax.
  • How often: Once. Medicare covers this vaccine as part of a person’s Part D plan.

Tetanus-diphtheria (Td) and tetanus-diphtheria-pertussis (Tdap)

  • Who: The CDC recommends a Td booster shot every 10 years for all adults. In 2010, the CDC recommended that adults of all ages get one dose of Tdap to get protection against pertussis (whooping cough), which has become more common.
    • Pertussis vaccination is especially important for those who will be around young babies, such as grandparents or childcare providers.
  • How often: The Td booster should be given every 10 years


For a more comprehensive list, compiled by  Leslie Kernisan, MD MPH, check out  This is one of the best summaries I could find, and have borrowed liberally from it.


Further reading:

What is a “Star Rating” and why Should You Care?

If you have read some of my previous posts, you know I have pointed out that judging healthcare quality is a muddled proposition at best.  Even for those of us that work in healthcare, it is very hard to make a clear recommendation about what hospital or doctor is “best”.  A big part of the problem is a nearly universal lack of precise information: what surgeon has the best outcomes, for example—how do you define what is best?  Some things are tracked, such as how likely a patient is to get a serious infection, need a blood transfusion, or be readmitted to the hospital due to a complication.  Other things we have not really begin to measure, such as how effectively surgery may relieve (or cause) pain, how quickly a patient recovers, and how soon they get back to work.  While patient satisfaction surveys are common, they don’t ask specific questions like this, and are usually filled out within 30 days of the encounter. Nobody really asks someone who had a knee replacement if they have gotten back to golf, jogging, or other things they enjoy six months or a year later—the data doesn’t exist.

Choosing a “best hospital” is bit like choosing a spouse—you may look at some objective criteria, but ultimately it comes down to the best fit for both of you.  Think about choosing a hospital in the same way—what is the best fit?


To make things a little easier on the average healthcare consumer (formerly known as a patient ☺) the Centers for Medicare & Medicaid Services publishes Star Ratings each year to measure quality in Medicare Advantage and Prescription Drug Plans, assist beneficiaries in finding the best plan for them, and determine MA Quality Bonus Payments. Moreover, the ratings support the efforts of CMS to improve accountability for the care provided by physicians, hospitals, and other providers.


How the Star Ratings are calculated varies depending on whether it is an insurance plan, hospital, nursing home, or other facility.  For hospitals, overall ratings summarize up to 57 quality measurements across seven areas of quality into a single star rating for each hospital. The major domains measured are:


  1. Mortality
  2. Safety of Care
  3. Readmission
  4. Patient Experience
  5. Effectiveness of Care
  6. Timeliness of Care
  7. Efficient Use of Medical Imaging


Not every hospital or plan is high-performing (5 stars).  The distribution of Star Ratings for hospitals in 2017 was as follows:


Overall Rating Number of Hospitals (N=4,579, %)
5 stars 337 (7.36%)
4 stars 1155 (25.22%)
3 stars 1187 (25.92%)
2 stars 753 (16.44%)
1 star 260 (5.68%)
N/A 887 (19.37%)


For Medicare plans, rather than hospitals, most are clustered in the range of 3.5-4.5 stars, but it is harder to reach the maximum of 5 stars in health plans than in hospital ratings.  The measurement domains are a little different too, but there is overlap. The domains include:

  • Outcomes
  • Intermediate Outcomes
  • Patient Experience
  • Access
  • Process


Another way of looking at this is the following:  If your hospital is 2 Stars or less, it is in the bottom third.  If your Medicare Advantage plan is 3.5 Stars or less, it too is in the bottom third,  


If you have other options in your area you should probably consider them.

Further reading:

What is a “Just Culture” and Why It’s Important to Improve Healthcare

A foundation of the patient safety movement is non-judgmental recognition of the ubiquity of human and system error. This appreciation of human imperfection creates a shift from a “culture of blame” toward a “culture of safety”.  The Veteran’s Administration (VA) summarizes this philosophy as follows: “We’ll never eliminate all individual errors. The goal is to design systems that are ‘fault tolerant,’ so that when an individual error occurs, it does not result in harm to a patient. That’s why we’ve based VA’s patient safety program…on prevention, not punishment”(2009). This paradigm became known as a “no blame” patient safety model.

This “no blame” culture has been questioned with the introduction of the concept of “just culture”(Marx 2001, Wachter and Pronovost 2009). The Agency for Healthcare Research and Quality (AHRQ) describes just culture as one that identifies and addresses systems issues that lead individuals to engage in unsafe behaviors while maintaining accountability.  Marx and AHRQ are careful to distinguish between “human error (e.g., slips), at-risk behavior (e.g., taking shortcuts), and reckless behavior (e.g., ignoring required safety steps), in contrast to an overarching ‘no-blame’ approach.” For example, an egregious form of recklessness is willful refusal to follow widely accepted and efficacious policies, akin to a pilot refusing to use checklists, or a physician consistently refusing to wash his or her hands.  

What should form the basis of a “just culture” in healthcare?  When preventable error results in an adverse outcome, should one focus on punishment or making amends?  Should one do anything at all if there is no harm? A similar tension is found in legal theory, which uses principles of retributive and restorative justice (Wenzel, Okimoto et al. 2008). Retributive justice, based on the principle of lex talionis (“an eye for an eye”), describes the “culture of blame”, where fault is decried and punishment is proportionate to harm.  Alternatively, restorative justice encourages responsibility, reparations, and rehabilitation. For example, a physician who ignores “time-outs” in the operating room would lose operating privileges for two weeks in the retributive model; in the restorative model they would receive advanced instruction on checklists and “never events” and be required to co-lead a training module on “time-outs” for new staff. Loss of privileges would remain a last resort, used only when prior remedies are ignored or ineffective.


Where does the individual physician fit into a just culture that must balance “no blame” and accountability?  While restorative disciplinary measures are appropriate in cases of misconduct involving willful disregard for safety or standards, as James Reason points out in the case of a “slip”, there is little benefit from simply “putting a carcass on the wall” to show you have done something (Marx 2007).


Without losing sight of the serious consequences to the patient, it is crucial to be cognizant of the fact that adverse outcomes can leave a devastating impact on the caregiver as well, who will often have many years, and thousands of patients, to care for over the rest of their career.  Even before an event is reviewed, usually at the first instance of recognition, the emotional and psychological consequences to the caregiver begin. The “sickening realization” of making the mistake turns into dread and agony, then defensiveness and anger. In many ways the physician becomes a “second victim” and is subject to the phenomenon of “secondary trauma”, which occurs when one witnesses a traumatic event (Wu 2000). Scott and colleagues outline the trajectory of recovery for the physician after an adverse event, noting six stages:  1) chaos and accident response, 2) intrusive reflections, 3) restoring personal integrity, 4) enduring the inquisition, 5) obtaining emotional first aid, and 6) moving on (Scott, Hirschinger et al. 2009). The last stage encompasses three pathways—dropping out, surviving, or thriving.

In the wake of an error-related adverse event, great care is needed to avoid giving the physician the sense that they are “on trial” for a crime.  If not, there is the potential of losing good doctors—literally by “dropping out” or figuratively by merely “surviving”—whose only fault is being human. One strategy to consider in evaluating a physician following an error, especially one that causes harm, is to focus on three crucial questions:

  1. Was the standard of care met, including adherence to crucial policies and guidelines?
  2. Is the physician willing to incorporate lessons learned into future practice?
  3. Is the physician committed to maintaining their relationship with the patient and participating in a full disclosure of events?

At all times, but particularly when these answers are obviously “yes”, physicians deserve maximal support (Pettker and Funai 2010). It may be especially powerful if the physician can maintain a role as an advocate for the patient’s best interests throughout the process, including deliberations regarding potential compensation. Ultimately in the wake of an adverse event, both the patient and the entire team of caregivers, will need additional support and monitoring.


Further reading:


“Patient Safety Primer:  Safety Culture.” Retrieved December 7, 2009, from

Affairs, U. S. D. o. V. (2009). “VA’s Approach to Patient Safety.” Retrieved December 7, 2009, 2009, from

Marx, D. (2001). Patient Safety and the “Just Culture”:  A Primer for Health Care Executives. New York, Columbia University.

Marx, D. (2007). “In Conversation with…David Marx, JD.” from

Pettker, C. M. and E. F. Funai (2010). “Getting it right when things go wrong.” Jama 303(10): 977-978.

Scott, S. D., et al. (2009). “The natural history of recovery for the healthcare provider “second victim” after adverse patient events.” Qual Saf Health Care 18(5): 325-330.

Wachter, R. M. and P. J. Pronovost (2009). “Balancing “no blame” with accountability in patient safety.” N Engl J Med 361(14): 1401-1406.

Wenzel, M., et al. (2008). “Retributive and restorative justice.” Law Hum Behav 32(5): 375-389.

Wu, A. W. (2000). “Medical error: the second victim. The doctor who makes the mistake needs help too.” Bmj 320(7237): 726-727.


The Role of Personal Responsibility in the Healthcare Cost Crisis

One of healthcare’s many problems is that there is a disconnect between those who consume healthcare and those who pay for it.  While the average patient is shouldering an increasing share of total cost, the major entities that pay for healthcare in the U.S. are employers and the government.  The Kaiser Family Foundation found that for those with private health insurance, the average percent of health insurance paid by employers is 83 percent for single coverage and 72 percent for family coverage.


Because we are free to live our lives as we wish and a third party often foots the lion’s share of the bill for the health consequences of our choices, good and bad, it is argued that a moral hazard exists.  A moral hazard is a situation in which party 1 bears the consequences for party 2’s actions, thus incentivizing bad or reckless behavior from party 2. It arises when both the parties have incomplete information about each other.


But is our current payment system a moral hazard? That individuals bear some responsibility for their health is undeniable. Behavior contributes to nearly half of cancer deaths in the United States, and up to 40 percent of all deaths. But viewing personal responsibility as a central driver of longer lives and lower medical costs is problematic.

Not surprisingly, most Americans think it is fair to charge those with an unhealthy lifestyle more (, or to somehow penalize such people.  Some states have tried this with Medicaid, but with disappointing results. In 2007, West Virginia asked Medicaid-eligible individuals to sign a personal responsibility agreement to qualify for enhanced benefits. The agreement required beneficiaries to keep medical appointments, take medications, avoid unnecessary emergency department visits, and participate in health screenings. Those who didn’t sign it — or couldn’t hold up their end of the bargain — had their benefits cut, and were enrolled in a basic plan that restricted prescription drug coverage. Less than 15 percent of those eligible signed the agreement, and more than 90 percent of children with Medicaid had benefits restricted. A key hoped-for outcome of this was to reduce emergency department use, but overall, the opposite happened. There was no clear improvement in health or healthy behavior. The experiment was scrapped in 2010.

There is another legitimate concern to this approach. It is unsurprising that when people must pay for a more of their healthcare, they use less care, but people also tend to lack the expertise necessary to make good choices about which care is indispensable.  While the hope is that the average patient would spend more on preventative care, the risk of procrastination, with attendant increases in acute care costs, are real.


My take:  I don’t think there are cogent arguments against any role for personal responsibility in healthcare.  The real issue is how you determine responsibility and implement a program.  For issues like smoking, it may be easier. If you offer counseling, nicotine replacement therapy, and other effective resources, it is possible (though difficult) to quit.  What is harder are things like obesity, which is simultaneously caused by lifestyle choices, genetics, and socioeconomic status, which in turn influences physical proximity to fresh food, availability of transportation, education about diet etc. etc.).  I think to eliminate the moral hazard, we should penalize behaviors that meet the following criteria, using smoking as an exemplar.


  • The behavior is such that even those with minimal education are aware of its dangers, and that awareness includes school-based education, public health awareness campaigns that use multiple forms of media, and knowledge of the danger by peers.  Smoking easily meets this criterion.
  • The behavior is active rather than passive, and is unrelated to a necessity of life. Smoking again meets this criterion, as does alcohol abuse.  Obviously, you do not need to smoke or drink alcohol to survive, and you need to go out and actively purchase these items, perhaps at the sacrifice of more essential and/or healthy things.  Obesity would not meet this criterion—you need to eat to live; it’s a question of magnitude, not behavior.
  • A good faith societal effort must be in place to remove obstacles to the corresponding healthy behavior.  Before a failure of personal responsibility can be considered, it must be ensured that the individual is educated about the condition in question, has fair access to medical and other services to support a change in behavior (including transportation as needed), and has at least the minimum required resources to effect change.


In sum, reasonable accommodations and resources must be available such that there is a fair chance of success before punitive measures (such as reduced benefits or higher premiums) will be considered.


Further reading: