Submitted by Michele Carter-Graham
Introduction
More folks including both individual adults and families are on their own to provide funding for healthcare. There is a growing trend of being your own freelance business owner, being a contract employee or being employed by a business that does not offer a health insurance benefit. Many people make the mistake of buying price instead of value in a healthcare funding plan. This article provides an overview of options for funding healthcare with both advantages and disadvantages of each strategy.
How Much does Healthcare Cost?
Understanding what healthcare costs is important to deciding the best strategy for funding your own healthcare needs. Buying based only on price and not value (price vs. benefits) is a common and very grave mistake. Some examples of what healthcare can cost will help illuminate the importance of value and risk transfer (insurance) in funding your own healthcare.
Routine Care: Having an ongoing relationship with a medical doctor is important value and can help you avoid much more costly illness and improve your overall health outcome. I am an example of the benefits of routine medical care with the goals of avoiding cardiovascular disease, diabetes and managing my sinus allergies. My recent doctor visit including blood test = $248 Well Baby Check (price from local pediatrician) = $160 Annual Physical = $500? Cost depends on how elaborate a physical you get.
Rx Drug: Prescription drugs are approximately 10% of total healthcare spending [1]. Prescription drugs can be a large component of treating a major or chronic illness. These are drugs that I take with the list prices from my local drug store. OTC Claratin (equivalent house brand) = $10 / month Crestor = $137.99 / month Astelin = $115.99 / month An example of a more expensive medicine that my wife takes regularly for her chronic migraines: Topamax (generic equivalent) = $566.99 / month
Diagnostic Tests: Diagnostic tests are an important part of most disease identification, management and treatment and are a large component of healthcare costs. My recent blood test (three panels) = $152 X-Rays = $100+ Mammogram = $150+ MRI = $1000+; a complex MRI can cost several thousand dollars
Emergency Care: ER Visit = $1000+; this is based on my experience – I have never had an ER visit that was less than a $1000 in billed costs
Hospital Admission About 30% of healthcare costs are for in-patient hospitalization. The average length of a hospital stay is five days [2] with costs highly dependent on treatment. Heart Arrhythmia (irregular heartbeat) – Example from one of my clients = $45,000 including an ER admission and then three days in the hospital
Major Illness: Cancer (Lymphoma) – My brother over two years of treatment = $500,000+; It is hard to tell the actual total but when I called to see if my brother was close to exceeding his $1 million lifetime limit the expectation was at least $500,000 in paid benefits to complete his cancer treatment.
Chronic Illness: A chronic illness is defined by a medical condition lasting a year or more that requires ongoing treatment. Examples are Diabetes, Asthma, hypertension and Depression. Approximately half of all Americans have some kind of chronic aliment [2]. Type 2 Diabetes – Average Annual Cost = $5949 [3] Asthma – Average Annual Cost = $3192 [4]
Put all of this in a gigantic pile and the average cost of healthcare in Texas according to the Texas Department of Insurance in 2006 was $7110 per person. That is $593 per month per person. Admittedly that includes a lot of unhealthy and high healthcare uses but it provides some perspective on what healthcare costs. If you have not had a close relative, family or friend with a serious illness or injury, it is hard to imagine the high cost of healthcare. Value in funding healthcare is more than helping with the cost of routine care. Value to me means grappling with the risk of a major illness or injury.
David W. Crump, Ross Gray Insurance Agency
I specialize in Business, Health and Personal Insurance sales and service.
A graduate of Texas Tech University (BBA Marketing), I began my career in retailing of Toy, Hobbies and Games. I have been a business owner but changed careers to insurance after selling my interest in a Dallas area Game Store Chain thirteen years ago. Hobbies include Gardening, Music (Bass Vocal) and Stock Investing.
Ross Gray Insurance Agency has a 30+ year history serving Central Texas on all facets of insurance. We are located in South Austin at 2404 S. IH-35. We are here to help!
Copyright 2009, Ross Gray Insurance Agency, Inc.
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About Michele: Michele Graham is the CEO of Professional Healthcare Management, a leading provider of medical business management services. Professional Healthcare Management started in 2003 and offers services to all medical professionals for credentialing and insurance contracting. We have performed services for over 3000 providers and multiple hospitals, surgical centers and wound care centers. Our fees are competitive and our staff is comprised of experienced professionals with years of experience in the healthcare industry. Michele has over 40 years experience in healthcare and we welcome anyone having issues getting contracted or getting paid. We try and negotiate better reimbursements for each and every provider....call for more information! |
