July 23, 2010, Newsletter Issue #40: 2. Rethink The Total Cost Of Care

Tip of the Week

First, you took a very high-level screener to give you a personal data sheet on indicators and lifestyle changes you could make. Then, you looked at how those lifestyle indicators (weight, waist, BMI, blood pressure, etc.) could influence serious disease, and you quantified your personal value of these conditions to your overall quality of life and desire for investment (the Value Equation worksheet).
Once again, open a worksheet or get some paper and a calculator so that you can understand the investment you are considering on a “what happens to my portfolio if I don’t make the investment?” basis.

Insert the health condition that you are considering: overweight (or BMI, or waist measure) what is the total that you assigned to this condition in terms of value (last chapter, tip 8)

Now, write the condition you are trying to avoid

How much money do you earn in one day of work? (Example here: 175.00)
Insert the amount of direct costs for the treatment of the condition. In this example, the costs for angioplasty have been inserted: $5344

Multiply the total days of missed work (approx 5) by the amount you earn/day, to understand how much, without insurance coverage, you may lose by missing the work (5 x 175 = $875)

And add that to the cost of the intervention (875 + 5344= $6219)

Multiply this amount by the total value you assigned to improving this condition (6219 x 12.5= $77,735)

Why is this valid? Because value is a relational number, meaning that it influences and is influenced by the “corporation’s” perception of the value of lost worktime, lost wages, lost investment opportunities. Because you are using the same metrics across conditions and comparisons, apply scoring methodology that is influenced by your mission and your goals, you have a relational way of comparing values of change. In this case, the example shows that making the condition change BEFORE it becomes very serious is worth, at this moment, $77,735 to you. That’s because investments in your health increase over time.

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