Beyond the physical and emotional burden of an illness, there is no secret that the financial burden can and does take a heavy toll when we are sick or caring for a loved one. For most people, insurance companies share some of this burden. However, even when we do have good insurance coverage, we sometimes have to make substantial out-of-pocket payments for goods and services related to an illness. In this article, I hope to help you identify some of the costs associated with an illness and how to go about managing them to reduce their impact.
If you ask most people how much an illness is costing them, they are most likely going to look at what they spend on healthcare products and services, on such things as insurance premiums or co-pays, doctors visits, medications, hospitalizations, devices and so on. These are what are called direct costs and for some, these direct costs are very substantial. There are, however two other types of costs that are usually ignored or not seen as arising from one’s illness or that of a loved one. These are indirect costs and intangible costs.
Indirect costs are costs that are usually known as economic costs, that is the lost opportunity that came about because we did not go to work, or were not as productive or died early and hence reduced our ability to contribute to our families and the community. The people who are very much affected by this are the self-employed, and employers, especially small businesses. Also if you are the sole breadwinner of the family or your income is a substantial part of the family income, the impact of your illness on your ability to produce economically can be very huge.
Intangible costs are costs that arise from the impact of a disease on our mental state and relationships to friends, family and loved ones. Ask anyone who suffers from depression or is a caregiver to someone with Alzheimer’s disease and they will tell you that the intangible costs can sometimes be more than the direct costs. In fact, we cannot even begin to put numbers on these costs.
So, again, the three main types of costs that an illness imposes on us are the direct cost, the indirect cost and the intangible cost. How do you mange these costs to reduce the financial impact of the illness? In one word, planning. Think of this as a house that is going to need heat in the winter. A lot of people wait till it is freezing out there and then they start checking to make sure they have enough fuel to keep the house warm. Well, it is more expensive to buy heating oil in the middle of a deep freeze, that is, if you can find any. The smart person buys heating oil in the summer, when it is less expensive, and, when the deep freeze comes along, they are ready.
It is not a matter of if, rather a matter of when, we will get sick or have to take care of a loved one who is sick. So, how do you plan for dealing with direct costs? You look to make sure that you have adequate health insurance, know how to obtain prescription drugs at low or no cost, understand how to deal with hospital costs, have a reliable primary care physician, and evaluate and know your options with nursing homes.
To prepare for indirect costs, know your rights at the work place for when you get sick. As a start, familiarize yourself with the Americans with Disabilities Act (ADA) and the Family And Medical Leave Act. Also know about other laws that protect you with health insurance issue, such as COBRA and HIPPA. Get disability insurance. Intangible costs can be better handled by doing some panning on legal issues such as end of life planning, making sure you have your will, living will, powers of attorney and your estate planning taken care of. Also here will be a good time and place to have long-term care insurance taken care of.
Obviously, when you or a loved one gets sick, the primary goal is to get you or them better. However, the reality is that the cost of the illness is a major concern and one that can have a dramatic impact on the patient and their family. With some planning the financial impact of a disease can be minimized.
Dr. David Nganele
