Market Health Works
by John Goodman
 A Commonwealth Fund study in the summer issue of Health Affairs
finds that high-cost patients with Health Savings Accounts (HSAs)
actually spend less out-of-pocket than they would under traditional
health plans. A Bloomberg wire service story treated this as a
newsworthy discovery of a "flaw" in design, since if less is spent
out-of-pocket, incentives to conserve costs under HSA plans must be
weaker.
The Answer: There is no news and there is no flaw.
HSA type-plans have been on the market for a decade in the United
States and for more than a decade in South Africa. Everyone
familiar with the plans knows that they typically lower
out-of-pocket expenses for high-cost patients. This fact is not
only well documented, it has been hashed over in the trade
literature, at health care conferences and in numerous think tank
pieces, including studies by the RAND Corporation, the Urban
Institute, the National Bureau for Economic Research (NBER) and
the National Center for Policy Analysis.
The only people who will find this recent "discovery" surprising
are HSA critics who have been saying for years that HSAs would harm
the sick, especially the chronically ill, and who (despite being
quite vocal) tend to have very little familiarity with actual
products on the market.
Far from being a "flaw," most HSA plans are an improvement over
traditional insurance, which has co-payments (sometimes without
limit) for expenses over which patients exercise no discretion
(e.g. inpatient hospital costs). Most HSA plans, by contrast,
allow patients to manage health care dollars for expenses over
which they can exercise discretion and where it is appropriate
for them to exercise discretion.
Here's a news flash: The goal of HSA plans is to allow patients
to manage their own health care dollars, not to see how much
financial pain we can make them suffer.
John Goodman is president of the National Center for Policy Analysis. The
Health Affairs article may be found at:
http://www.cmwf.org/publications/publications_show.htm?doc_id=382001
A survey of the literature on the same finding, made 10 years ago,
is in the NCPA Backgrounder, "MSAs can be a Windfall for All" at: http://www.ncpa.org/pub/bg/bg157/bg157.pdf
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