Healthcare Payer Business Model–The Grinch Who Stole Christmas

Karen, a good friend, dropped by this weekend.  She brought croissants and her Scottish terrier, I guess thinking we would eat one of the two.  The dog bared its teeth and growled at me, which made me divert my gaze to the croissant.  Fortunately for me, on the danger scale, terriers fall somewhere between guppies and sunflower seeds.  Karen has the fashion sense of an accordionist in a polka band.  One might argue, as she did, that I didn’t have the right to criticize her sartorial spender as I was dressed in bellbottom pants and was sporting a Puka shell necklace.

We talked politics.  When we do, it is a veritable Tennessee Williams play, akin to playing Twister on the edge of a cliff.  Our time together would have been more enjoyable had we simply agreed to listen to an eight-track tape of Abba. Ours was not a conversation for the junior varsity.  With or without the use of automatic weapons, to hold my own I had to step up my game with her.  Karen has always had a mind of her own—it’s how she uses it that keeps me awake at night.  Sometimes I feel as though our combined intellect could not solve the TV Guide crossword puzzle.

She was a Hillary acolyte and someone whose mission in life was wondering why Gilligan never left the island.  I however, was from the dark side and content to solve the world’s problems from the comfort of my Barcalounger.  I launched into defending my political position with as much trepidation as a middle school geography teacher trying to find Burma on a dated classroom map.  I would have had an easier time defending my position had I been trying to squeeze a hippo through a clarinet.

I tend to stand out even in a crowd of one.  Some people who know me think that I am the type of guy who might just walk into a Seven-Eleven and lose it just because the Slurpee machine wasn’t working.  That’s not true, unless, of course it was the blue Slurpee pump that was on the fritz.

Trump supporters.  When I speak of this, I speak in parenthesis to ensure I am not overheard.  Wondering what to do, I looked it up online. WWTDD—what would Tyler Durden Do? (The Fight Club).   The first rule of the Fight Club is that you don’t talk about the Fight Club.  The first rule of post-election politics is that you don’t tell anyone for whom you voted. I was disappointed to learn that there were no links on Google about anyone offering asylum to Trump supporters.

Being a Trump supporter is analogous to having a dirty secret.  While my friends and neighbors shared their political opinions incessantly prior to the election, everyone who had opined has gone into seclusion.  People get that way when the conservatism cat gets out of the bag; but I’m a dog person.

I grew up in Baltimore—70 miles from where I live as the crow flies; 90 miles if the crow were driving a pickup. My wife and I were supposed to be on our way to Baltimore but we were running late because one of us takes too long to put on our makeup and the other one of us gets impatient and threatens to leave.  This is when one of us decides to send the other one of us to a reeducation camp.  As someone who prides himself in knowing which way the wind is blowing, I changed out of my Brooks Brothers suit and dressed in rags and Birkenstocks.

So now you know how I spent the holiday.  I don’t have a segue, so let’s dive into this post and then you can get back to whatever it was you were doing.

The Wall Street Journal had an article about a drug that helps reduce the urge to smoke—Chantix.  The article wasn’t really about Chantix.  Rather, it focused on the fact that payers do not cover prescriptions for Chantix.

Healthcare just gets curiouser and curiouser.  If you’ve never smoked, smoke a pack a day for a month, try to quit, and then return to reading this post. Literature suggests it is easier to quit using heroin than to quit smoking.  I used to smoke.  I tried everything imaginable to quit. I even went to a hypnotist hoping that would help me quit smoking.  And the hypnosis worked.  Until I got in my car and immediately lit a cigarette.  (However, now, every time I hear my trigger word, “consumerism”, I stop whatever I’m doing and I launch into my version of Rosalind Russell singing Everything’s Coming Up Roses from the Broadway musical Gypsy.  It could have been worse. I could have been hypnotized to say the line from Silence of the Lambs, “It rubs the lotion on its skin; it does whatever it’s told.”)

I digressed.  So, I took Chantix, and I stopped smoking.

The WSJ article about why payers would not cover the cost of Chantix confused me.  After all, not smoking is a good thing.  Right?  Because not smoking would prevent several other illnesses.  A, implies B.  but that is not how payers look at the issue.  While they may be interested in preventing members from smoking, they have no financial interest in the fact that A leads to B for smokers.

When payers do the math, they know that some percentage of smokers are well on their way to B—contracting smoking-related diseases.  Smoking-related diseases that are expensive to treat.  Smoking-related diseases that do not count as pre-existing conditions.

Their logic makes financial sense to them.  We know smokers will cost us more in the long run.  So, if we cover Chantix, we are still stuck with paying for the diseases those smokers will incur once they quit smoking.  If we don’t cover smokers, we pay out less.

The payer care model for smokers seems to parallel Dickens’s line from A Christmas Carol—“Let them die and decrease the surplus population.”

Payers’ advertising buries that fact.  Their advertising continues to show healthy people picnicking and hang-gliding.  To be accurate, their commercials should depict a black and white clip of Alistair Sims explaining to the two men collecting charitable contributions, let them die and decease the surplus population.  Chantix only stops a percentage of smokers from smoking.  The let them die model is much more effective if your firm is responsible for paying smokers’ medical claims.

Once smokers die, the payers’ out-of-pocket costs are zero.

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