On healthcare ROI, Illinois fairs well

BY BRADY CREMEENS | Special to Watchdog.org

SPRINGFIELD — A new study reveals Illinoisans get more bang for their healthcare buck than many other states in the country — but that doesn’t mean they are necessarily paying less, experts warn.

Data from financial information company WalletHub shows the average return-on-investment for money spent on healthcare-related costs is higher in Illinois than in all but five other states.

WalletHub’s calculations consider metrics like healthcare insurance premium numbers, death rates and overall health ratings. These are compiled into a common score used to compare and contrast states’ average healthcare ROI.

In short, WalletHub’s formula took the healthcare quality ranking and divided it by the healthcare costs ranking.

Chris Conover is a research scholar at the Center for Health Policy & Inequalities Research at Duke University and an adjunct scholar at the American Enterprise Institute. He warns against drawing any strong conclusions about the health of Illinois residents or their healthcare spending.

“There is only a weak correlation between health and healthcare spending,” Conover said, “Because many other factors go into what makes healthcare and health insurance pricey or not.”

Conover said industry rules and regulations are a big factor in cost, but general lifestyle is the most important piece of the puzzle in terms of health.

“To say Illinoisans get a good ROI from their healthcare spending really doesn’t tell us much about the efficiency of the system or if they’re living healthy lifestyles,” he said. “Do they eat poorly? Do they smoke too much? Do they exercise or not? What does the state government require of the insurance and healthcare industries? All of these things play a bigger role than can be determined by aligning the mortality rate with individual healthcare spending.”

Melissa Fuster is an assistant professor of Nutrition, Food Studies and Public Health at New York University, and said often the healthcare ROI is indicative of the general healthiness of that region of the country. People who live healthier lifestyles on purpose are going to have, on average, a higher ROI on their healthcare spending, she said.

Fuster discussed the pros and cons of one of the most popular legislative attempts to curb unhealthy lifestyles.

“Economic disincentives, such as taxing “bad” and “unhealthy” foods, are often discussed as a way to encourage people to make healthier meal choices, following the logic of cigarette taxes.” Fuster said in the study. “However, ‘fast’/unhealthy foods and cigarettes are not equal. ‘Fast foods’ can include a variety of different foods and drinks, including the ‘healthy’ options being offered at many of these establishments. In addition, how would you define these ‘fast food’ establishments? Would you extend the tax beyond franchises, to small food establishments, such as the local taqueria or burger joint?”

Fuster said figuring out how to create effective disincentives for unhealthy food choices is a complicated matter.

“The effectiveness of such tax measures depends greatly on these implementation considerations, as well as the level of taxation applied to the fast-food — and resulting price — vis-a-vis the cost of the desired ‘healthier meal’ options,” she said.

In May, lawmakers discussed taxing soda sales in the state at the rate of one penny per ounce. State Rep. Robyn Gabel, D-Evanston, proposed the legislation and said it’s a vital step toward the healthier society Illinois desperately needs.

Timothy Bramlet, executive director at the Illinois Beverage Association, said his group fought against Gabel’s bill for economic reasons.

“Our soft drink producers and distributors are vehemently opposed to it,” he said. “It would have an impact on the amount of product we sell and therefore be the cause of a loss of jobs.”

Bramlet said taxing specific industries in an attempt to dictate public behavior is an inappropriate way to approach legislative action.

“So far, we’ve been successful in slowing down this kind of legislation,” he added. “It’s a grocery bill increase, which isn’t popular with politicians or their constituents.”

The bill failed to pass the House in the spring legislative session, but Gabel said it would have been a valuable asset for helping to curb what she called an obesity “epidemic.”

The bill would have “helped people rethink what they’re drinking and make different choices,” Gabel said. “Obesity is an epidemic in this country and this bill would help raise awareness.”

But Fuster said efforts like this aren’t always successful, even when paired with awareness-raising campaigns.

“I am skeptical about these campaigns as I feel that most of us know the benefits of a healthy lifestyle and the consequences of unhealthy and risky behavior,” Fuster said.

The return on healthcare spending investment in Illinois may be debatable, but recent data from the Manhattan Institute shows insurance premiums have increased across nearly the whole state. Of the 102 Illinois counties, the average insurance premium for males has risen in all 102, and for females in 100.

WalletHub says the average health insurance premium in 2013 for an individual was $5,884, while families paid an average of $16,351.

“To put that in perspective, single coverage has increased by 74 percent and family coverage by 80 percent since 2003,” the study says. “It’s no surprise that millions of Americans consider forgoing medical attention a better option than draining their savings.”

Illinois’ sixth place ranking is bested only by Minnesota, Utah, Kansas, Hawaii and Iowa.

The states with the poorest ROI rating are Louisiana and Mississippi. The study looked at data from 2013.

Brady Cremeens is a reporter with the Watchdog affiliate, Illinois News Network.