Monday, October 31, 2011

If It Wasn't Broke, Why Did You Try to Fix It?

I just returned from the Conference of Consulting Actuaries Annual Meeting (well, I haven't quite returned and I took some personal time in between). As usual, the meeting had some outstanding sessions with great learning opportunities. But, there is one theme that bothers me, and this is not a reflection on the meeting, but on the consulting profession -- too often, when something is working just fine, we have to try to fix it.

More on that in a minute, but first, for my regular readers (and I know that I am bold in putting an s at the end of reader), I apologize for the hiatus. The Annual Meeting was a busy place and time ... and then there was vacation, and while my mind was filled with lots of thoughts, this blog was not one of them.

Returning to my theme, however, I learned about some new (or maybe really old) designs for defined benefit plans. They were intended to be THE SOLUTION. We saw some illustrations. They produced very slightly different results than plans that were already popular. The new ones will be difficult to administer, and, even compared to DB plans of days past, these are designs that no participants will understand.

What's the point?

I also heard about companies that were doing more aggressive cost-sharing in their health care plans. What a wonderful euphemism -- cost-sharing. Isn't that just another name for, you as the employee are going to pay a lot more while we as the employer try to hold our costs down. 

Here is the situation where I find this to be the most laughable. Consider a company that touts its wellness programs. And, it wants to make sure that its employees are healthy and stay healthy (at least that's the propaganda). So, they offer you one regular checkup per year. And, they pay for it ... all of it. But, here's the catch. Suppose you need maintenance medication. Perhaps you have nothing but healthy lifestyle habits. But, your family has a history of high cholesterol. You are burdened with it, too. The longest prescription you can get is 180 days. To get your next refill, you have to go back and see your doctor for blood work (so, that's labs and an office visit). And, in your effort to stay well, neither of them is covered. 

This is the new design that is being touted. 

I liked the old system better. It wasn't broken. Now, it's fixed, and the new system IS broken.

"I see," said the blind man.

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