No two people are exactly alike, especially when it comes to medicine. Medical conditions can vary by age, race, gender, and a variety of other factors. Sickle-cell anemia, for example, is most common among African Americans; the prevalence of diabetes is highest among Alaskan Natives and American Indians; and men are more likely to die from congestive heart disease than women.
The Food and Drug Administration (FDA) recently acknowledged this diversity with its approval of BiDil, the first drug to treat congestive heart failure specifically in African Americans. In the 1980s, scientists studying BiDil found that African-American heart failure patients respond better than white patients to the medication. This was the impetus for a 2001 study of the drug's effects on an African-American patient population. The results of this study were stunning: a 43 percent decrease in the risk of mortality from heart failure. BiDil's approval is recognition of the promise of personalized health care and custom treatments for individuals and groups. That promise will not be fulfilled, however, without changes in the way that the government regulates health care.
BiDil is only the beginning for personalized medicine. Geneticists and pharmacologists are seeking to tailor drug therapies to the individual, maximizing effectiveness and minimizing side effects. Beyond factors of race, sex, and age, every person has a unique mixture of health problems and disease risk factors. Ideally, optimal treatment plans should reflect the different physiologies and values that make up America's pluralistic society. This is not the case today.
With health insurance today, whether a treatment will be covered by any given plan is determined by third parties, not the patient or doctor. Insurance companies negotiate with employers or government bodies to set coverage levels, but employees' and citizens' health needs vary greatly, reflecting individual differences, desires, and circumstances. Under today's arrangements, the promise of personalized health care cannot be fulfilled.
The Promise of Change
Ideally, a health care plan should accommodate an individual's needs as they change over time. But this is unlikely unless the person chooses his or her plan, owns that plan, and controls the terms and conditions of the policy. Ideally, a plan should adjust to reflect changes in its beneficiary's life, such as aging and increased dependence on medical services. With personal ownership, health plans become portable from job to job and through career transitions; this sort of ownership also brings with it greater personal control.
Making plans that cater to individuals' needs the norm cannot be accomplished without major changes in government policy. Greater choice and personal control over health insurance could be had by the provision of individual health care tax credits that offset the cost of insurance coverage. Beyond tax credits, policymakers would have to establish new rules governing health insurance contracts, including long-term care insurance, creating a level playing field for different kinds of insurance and broadening consumer access. Moreover, to ensure the broadest possible participation of individuals and families, policymakers would have to establish new risk adjustment or reinsurance arrangements, preferably at the state level.
The Power of Choice
To secure this level of personal choice, the government must look at how health insurance is financed and enable individuals and families, rather than employers and the government, to control the flow of money in the system. One way to accomplish this is to move from defined benefit to defined contribution health plans. A defined contribution plan would be, in effect, similar to the Federal Employees Health Benefits Program (FEHBP), which embodies "pro-consumer health care ideas." Federal workers in the FEHBP are armed with information: they can access a complete guide to offerings and straightforward online tools for comparing different plans. Evaluated by consumer groups and others, health plans in the FEHBP are rated annually on quality and service. Millions of federal workers chose from among the 249 competing health plans in 2004. And thanks to all this competition, premiums in the FEHBP grew much more slowly than those reported by nonfederal employers.
The Information Revolution
There is progress being made in the private sector. For example, United Healthcare offers a "Plan Comparison Calculator" to help participants choose the right plan for their health needs and budgets.
Vivius, a consumer-choice healthcare company based in Minneapolis, Minnesota, has developed a "build-your-own health plan" Web application. It calculates a unique premium for each family member based on their choices of benefits and providers. Under the Vivius program, employees are empowered to create their own expert panels of doctors, primary care providers, and specialists. Employers can offer extensive provider choices, thus encouraging employee involvement in choosing their level of coverage, their providers, and their premiums and co-payment amounts. The Vivius model not only helps employers take control of their expenses, but also makes costs transparent and encourages personal accountability among employees.
Likewise, Hewitt Associates, a major consulting firm, has a "Build Your Own" health plan that allows enrolled employees to "choose from a variety of predetermined deductibles, coinsurance levels, doctor and hospital networks, and prescription drug coverage levels to create a customized plan that meets their health care, financial, and risk tolerance needs." Employees can choose high levels of coverage for higher premiums or, to lower their monthly premiums, select less-extensive coverage and make personal health commitments, such as exercising regularly.
Such companies as Archer Daniels Midland, Verizon Communications, and the Thomson Corporation also offer custom medical plans, online support, comparison tools, and employee choice.
Beyond differences in benefits, treatments, and medical procedures, Americans also have different beliefs about what is right and wrong in the provision of health care services. With a broad choice of health plans, individuals can ensure that their ethical and moral beliefs about the provision of care and medical treatments are not violated. Those who do not approve of abortion, for example, would be free to spend their health insurance premiums on other medical services. Likewise, individuals who wish to have medical services provided within an ethical or moral framework of care that is compatible with their own values, particularly at the end of life, would be able to secure that kind of care. Personal choice is a powerful solvent for cultural or ethical conflict.
Medical professionals are developing the capacity to provision personalized care based upon genetic and personal characteristics, but while science and medicine are forging ahead, the health insurance market is lagging.
Still, there is some progress. In addition to the broad array of health plans available today to federal employees, more and more companies are providing information to their employees on benefit options and giving them real choices. Increasingly, consumer-based information systems let individuals make informed decisions for themselves and their families, taking into account their unique health care needs and conditions. With advances in medical science, the demand for personal choice will only grow. Lawmakers will have to adjust the federal and state policies that govern the health care system in response.
The way forward is with individual health care tax credits that would enable individuals to purchase the health plans of their choice; changes in the rules governing health insurance, including the geographical expansion of insurance markets and expansions of the kinds of health options available to an increasingly diverse population; and the creation of new risk adjustment or reinsurance arrangements to accommodate that diversity. With these changes, the promise of personalized health care can be fulfilled.
Christina Sochacki is Health Policy Fellow in, and Robert E. Moffit Ph.D., is Director of, The Center for Health Policy Studies at The Heritage Foundation.
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