As a child I often heard the Wise Ones tell the story.  About a time long ago in a land many valleys removed from our Shangri-la.  The Wise Ones referred to the place simply as "the heartland."  In the heartland the strong cared for the weak.  In the heartland the strong WANTED to care for the weak.  It was as natural as the next breath.

        Sickness and disease in the heartland was not dissimilar to what we experience in our own land today.  It was however, the remarkable approach to health, and to ill-health, which distinguished the enlightened citizens of the heartland from every other culture before or since, and which caused the Wise Ones to speak of the heartland in reverential tones.

        Imagine a society which communally responds to disease precisely as the human body does when fighting illness, focusing on the individual in crisis, bringing its incredible life forces to bear to heal a single soul.  Where nothing is more important than providing the nurture, the care, and the resources to return one fellow human being to health.  Imagine a society which experiences the death of one of its citizens as though it were the very death of society itself.  Imagine this environment, feel it in your soul, breathe it for a moment, and you will know what the citizens of the heartland knew with all their being - that there is nothing in the universe more important than the sanctity and honor of the human spirit, and no more important human goal than caring for one another.

        No one is really sure what became of the heartland.  Maybe it was overrun by cold-blooded dinosaurs who ate the good citizens of the heartland for lunch.  After all, the human spirit is low in cholesterol, and truth be told, dinosaurs don’t really give a hoot about the sanctity of the human spirit.  Or equally as plausible, maybe the heartland was taken over by a group of your average health care industry executives.  Perhaps your experience has been different than mine, but these guys don’t seem to be any more focused on the sanctity of the human spirit than the dinosaurs. 

        Which brings me to the point of the story - the state of our healthcare industry. (I can hear you saying to yourself, “Oh that’s where he is going with this.”)

        Is there anyone still reading this article who believes he or she is not paying enough toward health insurance premiums and would like to pay more?   Has anyone of us recently had the thought that our health insurance company is doing way too much for us, and it is time to give back?  If you have recently experienced such thoughts, it is time for you to stop reading this article and go straight to the hospital.  I will write a special column for you later while you are in recovery.

        The state of the health care industry is in flux, big flux.  The HMO craze which was forced on America 10 to 15 years ago has proven to be a bust.  Its very reason for being - to manage and control healthcare costs - is still in search of a solution.  Employers are struggling with the cost of healthcare, employees are struggling with the cost of healthcare.  It’s a mess.

        For the better part of the 20th Century employers have provided health insurance as a benefit of employment.  Nearly two-thirds of Americans receive healthcare coverage through their employer.  The average annual premium cost for workers is $2650 for a single person, and $7000 for a family.  Premiums are rising 10 to 25 percent annually.  Employers large and small are suffocating from the burden of healthcare costs.

        But as difficult as the burden may be, it is not really an option for employers to drop healthcare coverage completely.  To do so would be, as one consultant recently commented, to break a social contract with the American work force.

        So guess what?  Some very creative, enterprising business types are experimenting with new models for healthcare plans which are being lumped together under the heading “defined contribution plans”.  The two big boys on this new block are Definity (definityhealth.com) and Lumenos (lumenos.com).

        With traditional health insurance plans you and I are relatively isolated from, and ignorant of, the actual cost of medical care.  We pay a deductible, and maybe a small co-pay amount for each doctor visit, and typically share the first cost dollars of medical care 80/20 with our insurance company, up to the first $5000 or so of medical costs.  The doctor and hospital bills, however, are usually sent directly to the insurance company, and we are simply notified of how much we have to pay, up to our limit.

        Under the defined contribution models, however, the emphasis is placed on the insured, the consumer, you and me, to make the initial healthcare decisions, and to control the actual dollars being shelled out.  Here’s how it works:

        An employer will deposit a fixed amount, say between $2000 and $3000, in a spending account which the employee can use for virtually any healthcare expense, including those not typically covered by insurance, such as liposuction or a nose job.  The employee makes all the initial decisions about his/her healthcare and where the dollars are spent.  After the spending account runs dry then the employee is personally responsible for the next tier of healthcare costs, say $2500, until catastrophic insurance coverage kicks in.

        The idea is to get the consumer more involved in decision making, on the assumption that you and I will spend dollars, everyone’s dollars, far more carefully if we are actually in charge of the process.  It also is a clever means for shifting costs from the beleaguered employer to the beleaguered employee.

        What I see as the biggest obstacle in getting you and me to make these kinds of healthcare decisions is educating us sufficiently so that we are at least marginally competent to handle the responsibility.  New companies, such as WellMed (wellmed.com) are betting huge dollars that they have the answer. You can now go online with WellMed and create a personal healthcare file for yourself, store your healthcare records, identify personal health risks, and research every conceivable medical condition known to mankind. The idea, ultimately, is to make shopping for healthcare like shopping for a car or a computer.  Just another wonderful retail experience.

        One of the startups in the healthcare field is based right here in Shangri-la.  MinervaHealth (minervahealth.com), which went live a couple of months ago, takes the defined contribution plan to a new height by providing a financing component to the mix.  MinervaHealth has partnered with Zion’s Bank to create the Medical Bank Account, consisting of both a debit card and a credit card used exclusively for the purchase of healthcare needs.

        Whatever will they think of next?