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Charles Dickens opening sentence in A Tale of Two Cities could certainly apply to this juncture in American Society. “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness.” I have always loved the appropriate quote and the wisdom that comes with it. How could the Hebrew exile, Daniel, in ancient Persia have been able to forecast so accurately what we see as self-evident thousands of years later that “in the last days knowledge will increase.”

And it is this very explosion of knowledge and of the possibilities that the knowledge brings that leads to both wisdom and foolishness. We know that lots of people in American are unwell. We know that our fundamental lifestyle choices impact our level of wellness and of sickness. But just because we know something does not mean that we have the wisdom to handle that knowledge.

I doubt that anyone would think that it is a “bad” thing to try to take care of people with their serious medical conditions. But making the jump to the next choice, namely that we must therefore, as a society, cover the cost of all pre-existing conditions, is not so simple. For starters we must ask, “And how is this going to be paid for?”

I live in Austin, TX, where we have just seen some serious flooding caused by much needed rain. There have been several tragic examples of people who went around barricades, ignoring the warning of much water rushing over the road, and who have paid for this choice with their lives. Similarly, people who consistently choose to eat too much food or drink too much alcohol dramatically impact medical costs. It makes no more sense to subsidize such behavior than it does to encourage people to ignore the signs at low water crossings.

How similar to Dickens’ “it was an age of wisdom, it was the age of foolishness.”  If we are free to make choices, then we must also take responsibility for our choices. Health care costs are frequently directly impacted by the choices we make. To ask those who consistently make good choices to subsidize those who consistently make bad choices hardly encourages good behavior by either party!

This helps illustrate the psychology of different approaches to dealing with health care costs. Free-market principles state that people will act with enlightened self-interest. But it is very simple to distort these free market principles. For example, if I have a high deductible health insurance plan, and I know that going to the emergency room with my cough and cold is going to cost $1000 out of my pocket, I will probably rather just take some aspirin or Tylenol, or maybe visit an urgent care center run by a Physician’s Assistant inside my local CVS pharmacy. Those would be very rational decisions when dealing with something as simple as a cold. But if we subsidize the choices, saying that you only need to pay $100 to go to the emergency room, as many insurance policies would state, then you needlessly encourage people to go to the emergency room who would do fine with a much simpler level of care. Even worse, if for the really poor we tell them that they can (and should!) go to the ER for free, then we are incentivizing “bad” behavior which will actually penalize those who make good choices (I.e. everyone else who has to pick up the tab for the 70% of ER visits that are not justified from a medical point of view.)

Why do these issues matter? They matter because ever-escalating health care costs impact all of us one way or another. Whether it is through our taxes or through premium costs, someone has to pay the consequences of the decisions that are being made everyday. The Sedera approach is trying to balance some of these competing philosophies. We want to encourage personal responsibility, even while sharing within the Sedera community of companies, and their employees, the cost of each other’s medical needs. The Sedera approach (Health Care Sharing) encourages and rewards healthy choices, while making provision for the needs of every person within the companies that we serve.

Compassion and consequences, choices and responsibilities; these are as difficult to balance now as they were when Charles Dickens penned The Tale of Two Cities!