Stress: Is America Working too Hard?

According to a recently published survey by the American Psychological Association (APA), 52% of Americans are “concerned about their current levels of stress,” and one in three are regularly reporting “extreme” feelings of pressure and tension. These statistics are both alarming and troublesome, as they have exhibited steady increases over the past five years. As seen in the chart on the right, the leading causes of stress are work (74%) and money (73%). The strong value associated with productivity and financial gains in America is taking its toll on both businesses and employees, who are incurring large expenses and adverse health effects because of high levels of performance related anxiety. The American Institute of Stress indicated that businesses are losing 300 billion dollars a year due to excess stress in the workplace. The large cost is contributed to employee “accidents, absenteeism, turnover, diminished productivity, direct medical, legal, and insurance costs, and workers’ compensation awards as well as tort and FELA judgments.” A special report completed by WebMd, showed that stress is also manifesting itself as physical symptoms, with 43% of adults suffering from health conditions such as “headaches, high blood pressure, heart problems, diabetes, skin conditions, asthma, or arthritis in addition to depression and anxiety.” These health effects have led to greater medical care utilization, with 75 to 90 percent of doctor visits attributable to “stress-related ailments and complaints.” The merit-based system employed in the U.S. economy has taken a large toll on our nation’s health, where as alternative approaches emphasized in Europe may result in a more balanced lifestyle and improve our country’s health and happiness. Although, European countries such as France show lower rates of productivity, the slower work pace has shown positive impacts on people’s quality of life and America may want to consider adopting European methods of regulating the labor market in order to reduce the amount of work-related stress and greater need for medical care.

Although the APA study indicated that 82% of Americans believe that they are able to deal with stress well, they all report feeling the stress. While some survey respondents are able to use positive coping strategies such as exercise, listening to music, and reading to relax themselves, a large number rely on negative techniques including unhealthy eating habits, alcohol and drug consumption, and spending an excessive amount of time watching television and surfing the net. In addition, over 70% of the survey responses indicated people are experiencing “physical and psychological symptoms” due to stress. As shown in the exhibit to the left, a large number of people described feeling bodily symptoms such as fatigue and headaches. Almost half said they remained awake in bed at night due to stress. Mental effects due to tension were also prevalent and included “experiencing irritability or anger (50%)” and “feeling nervous (45%)”. Even though Americans are showing negative effects from stress, many of them stated that they would not make an effort to change unless they were internally motivated or encouraged by others to do so. Therefore, the imposition of regulations on the maximum number of hours’ people can work and employee assistance programs, like those utilized in France, may give people the needed push or incentive to reduce stress and prevent future health concerns.

The American Psychological Association points out that major causes of stress are work and money, and therefore recommends that companies help their employees improve their well being by offering “flexible schedules, providing assistance with childcare, helping employees with personal financial issues, and providing flexible leave options beyond those mandated by law.” The director of APA, Russ Newman, warned that there are signs of escalating problems with employees’ work-life balance. With advanced digital technology such as online messaging and blackberries, people are being held responsible to respond promptly even after work hours, which can invade employees’ personal time with family and friends. The APA study revealed, “the leading sources of stress at work are low salaries (44 percent); heavy work load (41 percent); lack of opportunities for advancement (40 percent); uncertain job expectations (40 percent); and long hours (39 percent).” Americans are confirming the fact that they need a greater amount of personal time to focus on their health and reduce stress by engaging in activities like exercise, meditation, sleep, and time with family and friends. This lesson may be learned from European countries like France, who place a higher priority on lifestyle.

One study revealed that “Americans aged 15 to 64, on a per-person basis, work up to 50 percent more than their European counterparts”. In terms of work culture, Europeans generally have more time off and a slower paced lifestyle than Americans. In France, businesses are required by law to have a maximum of 35 hours of work per week and a minimum of five weeks of vacation. This is in sharp contrast to the 80-hour work week the U.S. recently implemented for new doctors. The European regulations allow for more personal time and help decrease negative health effects caused by stress at work. Although productivity is needed to make a society function, it is obvious that America needs to re-evaluate the stress imposed on individuals by their jobs and financial compensation. Preventative care must be taken seriously and is an undeniably important part of medical care. Employers must learn how to create a proper work-life balance, which allows people to take care of themselves and reduce healthcare needs. The government and employers must realize the importance of keeping America’s working class healthy and happy if they want to continue to have a highly productive society.

Medicare Part D: Private Versus Public Market Efficiency

Democrats in the House of Representatives’ Oversight and Government Reform Committee released a groundbreaking study on October 15, 2007 that revealed major cost inefficiencies in Medicare Part D. The prescription drug program began in 2006 and now provides insurance coverage to approximately 24.1 million Americans over the age of 64. Unlike other parts of Medicare, Part D is unique in light of the fact that the federal government does not solely control the management of this program. According to Republican Senate Majority Leader Bill Frist, under the Medicare Modernization Act of 2003, the prescription drug program was designed to “allow competitive forces in the private market [to] generate the best savings for seniors.” As a result, Part D is administered by a partnership between private insurers and Medicare officials. Republicans are in favor of this insurance plan, which results in less government control of Medicare, while Democrats fear that “privatizing the delivery of the drug benefit has enriched the drug companies and insurance industry at the expense of seniors and taxpayers.” This has led Democrats to scrutinize the program’s success and release an unfavorable review of its shortcomings, which include high administration costs and lack of drug rebates for Medicare beneficiaries. While both Democrats and Republicans make valid points regarding the advantages and disadvantages of this program, it has become apparent that the federal government must closely monitor and evaluate the success of Medicare Part D to ensure the efficiency of the system for today’s seniors.

Democrats’ evaluated Medicare Part D based on twelve private insurers, including Aetna and Humana, which represent 75% of the current Medicare enrollees. The goal of the study was to determine “negotiated price discounts, rebates, and other price concessions obtained from drug manufacturers and pharmacies by Medicare drug plans; and the extent to which, and the methods by which, these discounts, rebates, and other price concessions obtained by Medicare drug plans are passed on to beneficiaries.” Results indicated that fifteen billion dollars could have been saved in Medicare costs in 2007 when compared to several other federal government prescription drug coverage programs and pharmacy benefit managers. These added expenses were attributed to several weak points as outlined below. First, administrative costs, sales costs, and profits were six times higher than those for Medicaid (please see image to the left). Second, drug spending was more than three times higher than Medicaid spending due to poor negotiated discount rates from drug manufacturers for prescriptions. Even with the smaller rebates from drug companies, Medicare Part D private insurers displayed increased profit-driven behavior by keeping more than their fair share of the drug rebates rather than sharing them with Medicare enrollees. Without any help from insurance companies, consumers who fell victim to the coverage gap or “donut hole” of Medicare Part D, were forced to pay for prescription drugs out of their own pocket . Excessive profit motives and lack of drug price discounts are key arguments that reinforce the need for government oversight. Furthermore the government needs to ensure that the advantages gained in a privatized program remain equitable and perform up to set health care standards.

On the other side of the spectrum, Republicans and President George W. Bush who advocate for the public-private partnership design of Medicare Part D state that the plan has “saved seniors money since it began offering benefits in 2006.” A survey conducted by J.D. Power and Associates further supports the prescription drug plan’s success by showing high levels of satisfaction by Medicare Part D enrollees. The analysis shows that about 75% of beneficiaries are “delighted” or “pleased” with their prescription coverage plans. The two areas that participants wanted to improve were education and communication regarding Medicare Part D plans. As portrayed in the image to the right, most states have over fifty insurance plan options, which can be very overwhelming for consumers. Nevertheless, Republicans and other supporters of Medicare’s prescription drug care plans believe that the overall program has been very successful in this early stage, and will continue to improve over time. Republicans of the House Oversight and Government Committee stated that, “The program operates smoothly and at significantly less cost than expected. As such, the concerns expressed by the majority (Democrats) are relatively minor in scope and not supported by accurate and meaningful analysis.”

With the controversial nature of the potential benefits and downfalls of Medicare Part D identified by the major political parties, it is important the government ensures that the program is staying true to its original intentions. The private sector may be able to generate more price competition that will allow seniors to obtain their prescriptions at lower prices, but evidence currently shows that other public programs are doing a much better job of controlling cost. Therefore, it’s the responsibility of the government to continuously monitor the performance of the various prescription coverage plans by auditing the private companies that manage them. According to a study by the Government Accountability Office, the Centers for Medicare and Medicaid Services (CMS) “has not met the statutory requirement to audit the financial records of at least on-third of the participating [Medicare Advantage] MA organizations for the contract years 2001-2005.” Without any government regulations or incentives, the private sector can slip into a downward spiral, in which financial greed overpowers the desire to help retirees obtain the medications they need at a reasonable cost. The federal government must continually review the cost of these drugs for seniors to protect them from “high and rising drug costs.” With open enrollment beginning this November, it will be interesting to watch the progress of Medicare Part D as a joint public-private venture.

Microsoft HealthVault: The Future of Medical Records

Last Thursday, Microsoft took the lead in fulfilling Bush’s objective to provide an electronic medical record for every American by 2014 with the launch of a new website; Microsoft HealthVault. This service is free of charge and allows patients “to collect, store, and share” their medical history with their doctors and other healthcare providers. With health records saved in one location, patients can manage their own healthcare records by viewing past x-rays, labs and other medical reports from various doctors all at once. This makes Microsoft HealthVault (Please see image to the right) especially useful for patients with serious health conditions such as diabetes or heart disease that need to be constantly monitored by more than one doctor or healthcare professional. These patients can upload their blood sugar, weight, and blood pressure levels on a regular basis to share with medical providers to better monitor their own healthcare. The active participation of physicians and hospitals in the new online system is critical to its success and will give patients the ability to have constant access to their medical files. As stated in the New York Times, “Tighter curbs on medical spending and an aging population with more health concerns are expected to prompt consumers to take a larger role in managing their own care, including using online tools”. By providing greater access to personal health information, Microsoft and other companies hope to take the lead on providing patients with a way to take control of their own healthcare.

Electronic medical records have the potential to create more efficiency in our healthcare system by eliminating paperwork, and creating a single medical file for each patient that can be continuously updated at various locations and times. According to studies reported by Catherine Rampell from the Washington Post, “creating a nationwide electronic medical-record network would save more than $500 billion in medical costs over 15 years”. Nevertheless, due to the novelty of this system, most consumers are apprehensive to use it. Many people still do not trust the World Wide Web, and they worry about the safety of their medical information online. Comments posted on blogs like TechCrunch, reveal that patients do not feel safe putting their personal medical history online with a private company like Microsoft, which has had several security breaches in the past. Microsoft has said that it has made security a top priority for HealthVault, emphasizing the fact that patients control their accounts and no information will be shared without their consent. Microsoft is also a member of TRUSTe, which is a nonprofit organization that builds “trust and confidence in the Internet by promoting the use of fair information practices”(Please see image to the left). Nonetheless, as noted by Peter Neupert, the Vice President of Microsoft’s health group, the company will need to build its reputation in regards to consumer privacy through consumer experience. The ability to make patients feel safe posting their medical information online is going to be one of the most difficult obstacles of electronic medical records.

Another impediment with implementing electronic medical records rather than maintaining paper-based files, is having healthcare providers actively participate in digitalizing their files. It is estimated that “about 90 percent of physicians and more than 80 percent of hospitals still use paper records”. Many healthcare providers are comfortable with their current systems and do not feel like that they have the time or the money to implement a computerized medical database for their patients. According to an interview with Dr. Robert A. Jenders at Cedars-Sinai Medical Center, implementing an electronic database is too much trouble because all of the employees would need to be re-trained and the new infrastructure would cost a lot of money without any guaranteed financial returns. Dr. Jenders states, “Their office practice works very well as it is now and time is money”. Without all healthcare providers working in a computerized database, patients’ information could remain staggered between electronic medical records and paper files leading to inconsistencies and medical errors.

Microsoft was the first big private company to launch a personalized medical record website but it will definitely not be the last. Google and AOL’s co-founder Steve Case, already have plans underway to launch electronic health record services of their own in the near future. With time, I believe that electronic medical records will dramatically reduce administration costs, increase efficiency, and create a single accessible medical record for each patient. However, in order for this to happen, Microsoft and other companies wanting to provide electronic medical record services need to earn the trust of their consumers, and create user-friendly systems that all healthcare providers would want to use.

CDHP: Shifting the Power of Healthcare Management to the Consumer

Would you like to manage your own healthcare? Now you can with a consumer-driven health plan (CDHP). This type of health insurance is increasing in popularity with a growing number of companies offering it every year and an estimated 3.8 million employees already enrolled (See image to the right). CDH plans allow people to participate in their healthcare expenditures by paying lower monthly premium contributions in exchange for higher deductibles and out-of- pocket maximums. Employees are provided with a supplemental healthcare plan and are responsible for managing their own healthcare expenses such as coinsurance and co-pay fees with one of two accounts; health reimbursement account (HRA) or health savings account (HSA). HRA is an account “owned and funded by the employer” while HSA is “owned by the employee and are funded either by the employee or with contributions from the employer”. With either of these accounts, CDH plans have provided a way for employers to reduce healthcare costs, and put more power in the hands of consumers.

With CDH plans, employers will no longer have to contribute to high premiums like those necessary for traditional HMO and PPO health care plans. According to a survey done by Mercer Human Resource Consulting, a higher deductible “reduces the employer’s share of annual premiums down to an average of $5,770 a person, about $1,000 lower than for other plans”. In addition, these plans allow consumers to purchase their healthcare on a need basis, and therefore eliminating what economists would identify as a possibility for moral hazard. Consumers would be able to reduce their costs by paying for healthcare that is suitable just for them.

The CDHP seems like a win-win situation.

Nevertheless, despite these arguments in favor of this plan, CDHP consumers’ survey results show that “44% are not likely to recommend them to others, compared to 19% of those with traditional health plans; 37% are not likely to stay with their plan if given another option (13% for those with traditional plans); and only 37% are very or extremely satisfied, against 67% of the folks with traditional plans”. It is evident that there are still many issues that need to be resolved for the future success of this novice plan design. Although CDH plans provide benefits to both the employers and employees, both groups must be wary of the potential downfalls of the plan design including high out-of-pocket maximums and minimal insurance coverage.

To reduce monthly premium contributions in CDH plans, out-of-pocket costs are increased in order to shift the liability of future health risks to the consumers. However, these out-of-pocket costs must be reasonable for a consumer and their family to afford. One problem, especially with the health savings account (HSA), is that employers can choose not to contribute to the account and leave it to the employee to manage and pay for their own deductibles and out-of-pocket maximums. This can cause a huge financial burden on employees’ with unexpected healthcare costs. In order for this health care plan to work, employer’s need to ensure that employee’s will not be abandoned in midst of a medical crisis.

Many individuals are skeptical about the CDH plan offerings because of the broad range of insurance coverage the plans offer. In a New York Times Article, Fran Hawthorne states, “one way to pay less is to cover less”. Many CDH plans will not provide well-rounded medical benefits including a combination of preventative, routine, and hospitalization coverage so that they can reduce costs. Without any aid from the insurance company, the costs for these office visits and procedures could strongly deter consumers from getting the healthcare that they need. This could potentially lead to even greater health risks and problems in the future. With the strong evidence and support for preventative care and early detection in today’s health care system, CDH plans must encourage employees to get the proper medical care in a timely fashion before their condition becomes life threatening and the cost of medical care is unaffordable.

The CDH plan proposes a new strategy for reducing healthcare expenses, which is desperately needed in light of today’s rising costs. Currently, the United States spends on average $5,283 per person a year for healthcare. CDH plans have the potential to help reduce the per capita cost for healthcare by lowering premiums and reducing unnecessary insurance coverage, but employers and employees must become active participants in their healthcare expenditures (Illustration of a CDHP advertisement can be seen on the left). Employers need to have a good understanding of the medical coverage that their employees need in order to provide comprehensive benefits that will reduce large claim liabilities; and employees must learn how to safely and properly budget their healthcare expenses to reduce their costs. In order to help ensure that this occurs, regulations should be imposed to guarantee coverage of preventative care services and greater price transparency by healthcare providers so that employers and employees can better understand the nature and costs of healthcare. In order for healthcare to progress, everyone needs to have a better understanding of how their medical insurance works so that can use it in a more efficient and effective manner.