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More on HSA's

from that liberal rag "The Economist", an article on our health care dilemna, including this tidbit on why HSA's won't do squat to control costs:

To an administration that believes the answer to every problem is lower taxes, the appeal of these ideas is obvious. Many health experts, however, are deeply sceptical, both about whether the shift to higher-deductible plans will actually reduce health-care inflation and, even if it does, whether the government should encourage this trend with more tax cuts.

The logic of consumer-driven health care assumes that unnecessary doctor visits and procedures lie at the heart of America's health-care inflation. And it assumes that individual patients can become discerning consumers of health care. Both are questionable. Most American health-care spending is on people with chronic diseases, such as diabetics, whose health care costs many thousands of dollars a year, easily exceeding even high deductibles.

Instead, critics worry that greater cost-consciousness will deter people, particularly poor people, from essential preventive medical care, a trend that could even raise long-term costs. A classic study by the Rand Corporation in the 1970s showed that higher cost-sharing reduced both necessary and unnecessary medical spending in about equal proportion.

In other words, somebody who already has diabetes isn't going to save you any money when you stick him on an HSA, but somebody who might GET diabetes without preventative care will be even less likely to get that care, since now he's got to pay for 100% of the cost himself.

This backs up what I said yesterday - that the people who think HSAs will make people spend less on health care are fooling themselves. People who can get HSAs are primarily the employed, and those with a fair amount of money. None of those people are likely to go get unnecessary medical treatments - most of the money we spend in this country is on heroic interventions and on inefficient health care provided to the poor at emergency rooms. We clearly aren't going to stop spending so much on the elderly, and they clearly still have plenty of time to sit in doctors' offices anyways. The poor who clog up emergency rooms either aren't going to be able to get insurance at all (just like today), or won't be able to afford to contribute anything into the attached HSA anyways. No change, except that the wealthy employed get a bigger tax break.

This entry was posted in the following categories: Economics , Politics (Outside Austin)