Stanley Feld M.D.,FACP,MACE
I could never understand why my understanding of the original Medical Savings Accounts presented by John Goodman in 1994 slowly got changed to a Health Savings Accountsounding the same but using a different formula for payment and savings.
Many consulting firms worked hard to change the structure of the original Medical Savings Account to the structure of the Health Savings Account. They also convinced congress to pass a bill permitting the structure of the HSA instead of the MSA.
To my amazement, Mr. Nussbaum Director, Group and Healthcare, North America, Watson Wyatt Worldwide explained the reason for the change clearly, saying it is unlikely that significant numbers of employers will simply drop coverage for their workers.
“The weak economy could prompt more of them to push for so-called consumer-driven plans. Such plans tend to offset lower premiums with higher annual deductibles. And when a weak economy undermines job security, he said, workers may simply have to accept reduced benefits. Even so, more companies may see themselves as having little choice but to require employees to pay even more of their health expenses.” 04insure.html?_r=3&th&emc=th&oref=slogin&oref=slogin&oref=slogin
Mr. Nussbaum dismisses Health Savings Accounts out of hand as a way that forces consumers to pay for their healthcare insurance.
I believe the consulting firms figured out a way for the healthcare insurance industry to remain in control of the healthcare system and relieve the employer of the responsibility of paying for the healthcare insurance needs of their employees.
“And while these plans often allow employees to put pre-tax savings into special health care accounts, they typically end up forcing the worker to assume a bigger share of overall medical costs. About six million people are now enrolled in these medical plans.”
The director of a major health benefits organization (Watson-Wyatt) revealed the subtext purpose of the Health Savings Accounts. These plans seem to be evolving into plans that take the burden of payment out of the employers’ hands and into the employees’ hands with the control of the money remaining in the healthcare insurance industry’s hands. That was a neat trick. It will probably do little to Repair the Healthcare System.
The Consumer Driven Healthcare movement is an exciting movement to me because it promises to put consumers in control of their healthcare dollar and not the healthcare insurance industry.
Politics and powerful stakeholders’ agenda always seem to contaminate solutions to problems in order to protect its vested interest. The healthcare insurance industry has done and is doing just that to the consumer driven healthcare movement. I believe its goal is to destroy the consumer driven healthcare movement. The healthcare insurance industry has not been pushing HSA’s . because, I suspect because the net profit is less than traditional plans.
Health Savings Accounts do not motivate patients to save money. The healthcare insurance industry still controls the premium rates, and designs the patients’ deductibles and co-pays. The healthcare insurance industry can manipulate deductibles and deplete the HSA. If there is less money in the HSA out of pocket expenses will be higher.
The original concept of consumer driven health care was to provide the consumer with the purchasing power to control the costs of healthcare. Most other consumer driven purchases such as automobiles, computers, houses, and food control the costs using purchasing power and forcing providers to compete.
Wal-Mart and Target are really consumer extenders that drive down the costs to consumers utilizing their companies’ purchasing power. The purchase remains the consumers’ choice.
In the process it eliminates much of the non transparent 150 billion dollar skimming off the top of the healthcare insurance industry for “expenses”.. It also eliminates the control the healthcare insurance industry has on the consumer. The consumer has control over the first $6,000 and pays the first $6,000 of services. Anything he does not spend goes into his retirement fund. The money is out of play for the insurance company of other vendors.
If the consumer spends the $6,000 appropriately he gets first dollar coverage without deductibles. The consumer is by true insurance for risk. If he has a chronic disease and it is determined that certain amount of money would have to be spent to avoid complications of that disease he should be eligible for a bonus since he has saved the system a great deal of money. This is an example of the incentive I have described previously. As an example a Type 2 Diabetic should spend $4500 a year to prevent complications of his disease. If he does he keeps the remaining $1500 and gets a $2250 reward totaling $3750. This is the financial reward for losing weight, exercising, maintaining a normal blood sugar and functioning in the work place at a high level.
Healthcare insurance should be available to everyone regardless of pre-existing illness. It should be paid with pre-tax dollars regardless of the payer. It should be community rated and not individually rated.
Who pays for the premium? It could employer, the government with subsides, or the patient himself. All would pay with pre-tax dollars. All consumers would be automatically eligible without penalty. Monies not spent or monies for performance would accrue in a tax free retirement account until withdrawn.
Medicare and Medicaid entitlement programs would be eliminated. The government could get out of the way after making the rules and providing effective subsidy programs. The government would guarantee and enforce the requirements for real price transparency from insurance carriers, hospitals, physicians and drug companies.
The New York Times article simply confuses the issue. It does not clarifying anything. It presents war stories that we have no way to cure.
Let us stop complaining. Let us start demanding positive constructive action from our local, state, and national government.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.