Consumer-Driven Plans Could Save $73.6 Billion if Universally Adopted by Employers

Consumption is the sole end and purpose of all production, and the interest of the provider ought to be attended to only so far as it may be necessary for promoting that of the consumer.

Adam Smith (1723-1790),  An Inquiry into the Nature and Causes of the Wealth of Nations, 1776

May 15, 2012 -  It's a  market-based  argument: that if we only left health care in the hands of consumers spending their own money, costs would plummet.

Govenment elitists rebut: the sick and less well-off would suffer, avoid preventive tests,  neglect office visits, and their health would worsen. 
Critics fail to mention the acknowledged  reality  that medical care accounts for only about 10% of any population's overall health - far behind patient behavior,  genetic predispstion,  social deprivation, and environmental hazards - as factors affecting health. .

John Goodman,  who calls himself "The Father of Health Savings Accounts,' says it  ain't so that HSAs downgrade health status  but  instead merely  reduce costs.  In yesterday's Health Alert Blog,  Greg Scandlen, standing in for Goodman, cites a Health Affairs study  that says if one-half of employer sponsored plans would adopt HSA/HRA plans, the U.S. could save employers and workers $57.1 billion - and if all employers offered these plans $73.6 billion could be saved - and employees' health would remain the same in so far as we can tell from existing data.

Evidence indicates employers spend less in HSAs/HRAs than in traditional PPOs and HMOs. Inpatient  care drop 22.1%, outpatient care $18.2 %, and prescription drugs by 16.0%.  Further, those at high risk  or low income reduce spending by 20.9%, those with low income by 17.3% and those with chronic diseasse by 14.7%.

The rub?  HSA and HRA critics and advocates of  Obamacare  say consumers lack enough common sense and information to negotiate or to buy their own care.  Only government or managed care "experts," armed with best practice protocols and vast databanks based on comparative outcomes can do that.  Consumers cannot be trusted.  Experts can.

Tweet:  A Health Affairs study indicate HSA/HRA sponsorship by 1/2 of major employers could save $57.1 billion on health care costs.

Source:  "Growth of Consumer-Directed Health Plans to One-Half of All Employer-Sponsored Insurance Could Save $57 billion Annually," Health Affairs,  May, 2012.