Body implants to monitor a patient's health! Lower insurance and health costs!

Wanna lower health insurance rates? Charge unhealthy (Obese, smokers, alcoholics, sedentary, yada yada yada) more than you would charge those that are making the effort (with results) to take care of themselves! That’s all I am gonna say about that!

Will Body Monitoring Implants Be The Future of Healthcare?

Adam Ozimek, CONTRIBUTOR    Forbes Business     MAR 8, 2013 @ 6:00 AM 

A classic problem with insurance markets is that the insurer can’t monitor everyone’s behavior, which creates the moral hazard problem: individuals take on too much risk because they don’t have to pay the full cost. But insurance will only make people behave more risky if the insurer can’t charge them for it. Car insurance companies look to be at long last investigating ways to minimize this information problem by incentivizing drivers to put devices on their cars to partly measure how risky of drivers they are. With health care costs rising and increasingly subsidized by the government, it begs the question of whether such monitoring will become necessary for healthcare in the future?

Future technologies will certainly make this easier. Already we are seeing more and more of the “quantified self”, as new products allow us monitor our bodies and amass data about our behaviors. You can track the number of steps you take in a day, your heart rate, how many calories you’re burning, how you’re sleeping. But future technologies are pointing in an even more exhaustive, and some would say intrusive, self-monitoring direction. Research is being done on biomonitoring implants that will keep track of how your body is doing from the inside. Wired reports on how the U.S. government is funding some of this research:

In a new call for research, Darpa is asking for proposals to devise prototype implantable biosensors. Once inserted under a soldier’s skin, Darpa wants the sensors to provide real-time, accurate measurements of “DoD-relevant biomarkers” including stress hormones, like cortisol, and compounds that signal inflammation, like histamine.

Implantable sensors are only the latest of several Pentagon-backed ventures to track a soldier’s health. Darpa’s already looked into tracking “nutritional biomarkers” to evaluate troops’ diets….

With devices like these a health insurance company could offer you discounts for keeping your stress level low, eating healthy, getting more sleep, and generally engaging in behaviors that make you healthier and thus cheaper to insure. Markets will be providing feedback to us that will put a price on our vices. This not only provides us with incentives but information, as our insurers quantify and remind us of the benefits of healthy behavior in dollar terms. Importantly, unlike many paternalistic prohibitions and regulations people will be free to ignore these price signals. Furthermore, if consumers find the nudges undesirable enough then some health insurance companies won’t require them and consumers will be able to choose to avoid them altogether.

In some sense though, regulations are moving us away from this direction. The adjusted community rating part of Obamacare says that insurance companies can only adjust your insurance premium based on your age, where you live, and whether you smoke. There is an understandable motivation for this too: we want insurance to incentivize healthy behaviors, but a lot of health issues are things we are born with. To many it is clearly unfair that someone should have to pay more for healthcare because of how they did in the genetic lottery. However, the exception for smoking shows that people clearly see unhealthy behaviors as something fair to charge people for.  Yet we have an outright ban on health considerations in part because health outcomes are easier to measure than health behaviors ex post, and so any attempts to punish unhealthy behavior risks punishing unfortunate genetics. But if future technologies make reliably measuring unhealthy behaviors easier than this will be less of a problem.

While Obamacare limits how rates can be set, it does appear that discounts for wellness and prevention programs of some form will be allowed. It’s unclear whether or not this would include discounts for healthy behavior as reported by implantable biosensors. But if healthcare costs continue growing and technological innovation in this area improves the economic pressure will be on lawmakers to allow this, insurance companies to promote it, and individuals to abide by it. Obviously this will strike many today as extremely invasive, but if healthcare costs take up enough of our income then I predict the invasiveness will seem less and less consequential.