BushCo has bought into the idea of "health savings accounts" as designed by a couple of economists named John C. Goodman and Mark Pauly. These guys hang out at a conservative Dallas think tank and Bush has been smitten with their ideas for some time now. A recent university alumni rag with high circulation featured a completely unbalanced piece about Goodman and his ideas as "an answer to health care costs". (prefer to be vague to reveal few specifics about myself)
These accounts ARE NOT AN ANSWER to our nation's health care problems. I agree with the framing diaries on this site that we should not call them "health savings accounts." more on why below the fold...
Here are some arguments we need to sharpen up on and be ready to push hard with against the wide adoption of these "health savings accounts". Use these points to write letters to editors, etc.. (i have already done so to the aforementioned university alumni magazine.)
The problem:
The folks behind BushCo's health care team have designed these accounts as though the health care system is like a department store, where patients shop and select services at will, paying with these "savings" accounts.
What's missing from this paradigm?
-physicians, not patients, drive most consumption of expensive health services.
-good public health studies show that the middle class is willing to pay out-of-pocket for inappropriate care. These "health savings accounts" seek to pad "the pocket" for consumers to do just that.
-Without price controls and increased regulation by government, these accounts will not bring down the national or individual expenditure on health care.
To be clear:
these accounts are not savings accounts, at all. They allow individual to withdraw money not used for medical services at the end of the year, with no requirement that the money then be used for health care. My intro economics class taught me that poor people have a higher "marginal utility of money." Translation: they need the cash. Therefore, they are at risk for forgoing appropriate medical care in an effort to cash-out on these accounts at the end of the year. This will worsen current inequalities in health care. Also, it will keep health care costs high, as preventative services will continue to be underutilized and emergency and acute (more expensive) care services will continue to be the point of entry for many health care consumers.
another complicated issue
-another issue not addressed by these "health savings accounts" is the loss of risk spreading. These accounts essentially amount to less insurance for healthy people. Currently, low-risk and high-risk individuals pay into the same plans, with the low-risk, healthy people essentially cross-subsidizing the high-risk, individuals. By moving to "health savings accounts" low-risk individuals would opt out of traditional managed care plans in favor of employee-sponsored, less expensive catastrophic plans. However, high-risk individuals with chronic illnesses or expensive medical needs would remain in the traditional managed care plans. This would result in higher premiums for high-risk individuals to make up for the loss of low-risk enrollees. Thus penalizing the unhealthy and the unlucky with higher priced health care coverage. This is not an answer to health care costs, it is a reshuffling of burden onto those with illness. While this is certainly a bonus for low-risk people, who among us is guaranteed to remain healthy for life?
We certainly need an earnest, patient-centered debate in this country on how to reign in health care costs. However, these "health savings accounts" are not the answer.
Furthermore, assertions that these accounts have worked in Singapore is misleading. Singapore has a multi-tiered complicated health system to accompany these accounts. There, you are not allowed to withdraw money from your health savings account at the end of the year. Additionally, there are extensive complicated government regulations of prices for medical services that the Singaporean governement had to institute in 1994 after a public statement that the HSA's had INCREASED costs.