Health Savings Accounts: Skeptics and Believers

I’ve been following the dialogue between non-believers and believers in Health Savings Accounts and Consumer Driven Care since HSAs were made widely available to Americans in the Medicare Modernization Act of December 8. 2003. HSAs are five years old, and about 20 percent of non-Medicare employees belong to these plans. Have HSAs succeeded or failed? It depends on to whom you talk.

HSA followers fall into two camps:

• Skeptics often are members of health-policy think tanks and academic institutions. They tend to think patients should be “managed” by top-down authorities who know what’s wise for patients. They focus on quality, outcomes, and value. They believe traditional HMOs and PPOs with no or low co-pays but with higher premiums are preferable to Health Savings Accounts with lower premiums but in which patients must pay a high deductible and are responsible for their care in tandem with physicians but often outside the realm of third parties.

Paul Ginsberg, President of the Center for Studying Health System Change, and Professor James Robinson of School of Public Health at the University of California in Berkley expressed this point of view in a Health Affairs January 27 online article, “Consumer-Driven Care: Promises and Performance.”

“The market is generating product designs that combine elements of consumerism and elements of managed care, but the trend is always towards a stronger role of consumer choice and a weaker role for management of these choices by physicians, insurers, employers, and regulators.”

As I read their article, I gathered the authors felt that “a stronger role for consumer choice” was not wise. “Stronger consumer choices” may result in delay of needed care because of high deductibles, and favors the healthy and the wealthy more than those with chronic disease and less wealth or those at high risk who need more preventive care. I gained the sense that the writers thought patients were ill-equipped to judge proper care, and concluded these were just a few of the reasons growth of consumer-driven care was “anemic.”

• A believer took only three days to offer a rejoinder to the Ginsburg-Robinson article. Here is how Greg Scandlen, President of the Center for Healthcare Consumer Choice, responded to the Ginsberg-Robinson piece,

“My bigger objection to the article is the way the authors cherry-pick and mischaracterize the available evidence.

They try to make the case that CDHC adoption has been "anemic," but they do so by purposefully overlooking the available data. They acknowledge that, "The HDHP represents the most important product innovation in health insurance since the point-of-service (POS) product, (but) the HDHP has been a disappointment in terms of actual sales."

To support that idea they cite AHIP's census of HSA-qualified health plans. But AHIP counts ONLY plans that are HSA-qualified. It does not count HRA plans or stand-alone HDHPs. In fact, the CDC's annual NHIS survey found that over 20% of the under-65 population were enrolled in HDHPs as of the middle of 2008.

Ain't nuthin "anemic" about that. This finding was confirmed by the KFF/HRET annual survey of employers that found 18% of workers are in HDHPs. The authors had the KFF/HRET survey right in front of them and cited it in arguing that only 8% of workers are in "HDHPs with a savings option!" But they didn't say that "savings options" are "the most important product innovation," they said HDHPs are. As critics have rightly pointed out, there is no advantage in having a tax-favored savings account for a person who pays no taxes. But the behavioral impact of the HDHP applies with or without the savings option.

Even more astonishing is the authors' complete disregard of those behavioral changes, which have been well documented by the parties best positioned to measure it. Just in the past few months reports have been released by the Mercer Company, WellPoint, CIGNA, the Blue Cross Blue Shield Association, United Healthcare, Aon Consulting, and even the chronically skeptical EBRI, all showing that people in CDHPs pay more attention, seek out information, participate in wellness and prevention programs, choose lower-cost treatments, and save substantial amounts of money for themselves and their employers.”

Strong Criticism

This is strong criticism. I shall not join the debate, but I would like to cite another physician’s point of view. William West, MD, of Reading, Pennsylvania, who is president of First HSA, Inc, has this to say,

“Health Savings Accounts reconnect the patient and provider by revealing the true costs of health care services. What we have seen so far is 20 percent to 50 percent decrease in cost utilization. This is because of consumerism – people being alert to true costs. Consumers now shop for health care services, they increasingly use generic drugs, and they ask questions about the necessity of additional testing.”

Questions to Ponder

As I pondered these divergent comments on HSAs and High Deductible Plans, my mind drifted to two phrases being bandied about these days.

• First was President Obama expression that we must now live in the “Age of Responsibility.” Who should be responsible for costs of patient care? Government? Employers? Health plans? Regulators? Physicians? Patients themselves? Ponder that. It is not an easy question to answer.

• Second, was that phrase that so easily trips off the tongue – “Patientcentered care.” We all should focus on patients, of course. And patirnyd themselves should focus on their own health. Should they pay for a greater portion of their care? who takes the lead? And what form should patient-centered take? Again, that’s something to ponder.

I know only one thing. As long as someone else pays the bill, and costs remain invisible to patients, costs will continue to surge.