Why Health Insurance Doesn’t Work

Health-care costs—really, disease-care costs—continue to rise faster than inflation and wage increases, and are reaching a tipping point.  According to the Kaiser Family Foundation, premiums have risen 87 percent in the past six years to an average of $11,480 annually for family coverage, which is almost what a minimum-wage worker earns.  And over 47 million Americans don't have health insurance at all, which is appalling.  This issue is already playing an important role in the presidential campaign.

Most Americans receive health insurance from their employers.  As costs continue to rise, there is a growing awareness that this system is unsustainable.  An unusual alliance is beginning to emerge between management and labor, Democrats and Republicans, conservatives and liberals.  One of the leaders of this influential movement is Steve Burd, CEO of Safeway.  We met a few years ago, when the Safeway Foundation provided a grant to the nonprofit Preventive Medicine Research Institute (which I direct) in support of our research showing that comprehensive lifestyle changes may stop or reverse the progression of prostate cancer.  I interviewed him earlier this week.  Excerpts:

Dean Ornish: What are you trying to accomplish?
Steve Burd:  We're trying to take a leadership role in solving the nation's health-care crisis. We want everybody in this country to have health insurance.  In our experience at Safeway, we're confident that we can actually improve the quality of health care while taking costs down and using the savings to help finance coverage of low-income people who are clearly going to need help to pay for insurance.  And there's no need to raise taxes.

How did you get interested in this issue?
Our health-care costs for our employees reached $1 billion and were exceeding our net income by about 20 percent.

Clearly, that's not sustainable.
No, it's not.  We're a high-volume, low-margin business, so we decided to reinvent our own approach to health care.  The great revelation was that 50-70 percent of health-care costs are driven by people's behaviors.  Ten years ago, I thought genetics played an overpowering role.  I've now come to believe that personal behavior really plays a much larger role.

The Interheart study looked at 30,000 men and women in 52 countries on every continent and found that nine factors—all related to diet and lifestyle—accounted for more than 90 percent of the risk of coronary heart disease, which is the No. 1 cause of premature death.  So, your number may be an underestimation.
Most people really don't have any idea that behavior is that important.  And, for the most part, insurance plans don't take behavior into account as directly as we've done at Safeway.