Blasphemous Thoughts on Health Costs

Great truths begin as blasphemies.

George Bernard Shaw(1856-1950)

July 24, 2012 -  I seek truths in these blogs.   Unfortunately, sometimes what I say comes out as blasphemies. 

To wit.

·         The U.S. health system problems are not due to its failures but to its successes, which lead to excesses.  Speak to enough Americans, and you will quickly realize that it is common knowledge that joint replacements relief pain and restore function,  coronary stents and bypasses save and prolong lives,  cataract and Lasix procedures restore normal visions, and  access to specialists who perform these procedures is quick and easy in the U.S.  News of these positive results spread rapidly among friends and across the community.   It is sad to say, but , because of their effectiveness,  these surgical treatments are among the most costly for Medicare.  Nothing succeeds like success in relieving pain, saving lives, and restoring vision, but at the same time, nothing exceeds like excess demand in driving up costs.   Specialists are very good at what they do,  which is why more aging  consumers go to them to get  things done that have worked so well for others.

Blasephemy Number One -  Consumers with high expectations of success, learned from friends, relatives, and neighbors,  not specialists, drive demand for high tech surgeries.

·         The best hope and only proven method so are for containing costs are health savings accounts and their variants tied to high deductible plans.    Some 15  million to 18 million  Americans now avail themselves of HSAs, employees know HSA premiums are lower, and  their employees know HSAs save money by as much as 30% over traditional HMOs and PPOs.   Why are HSAs blasphemous?  Because they go against core liberal  beliefs that health care is a “right” for all, not just HSA holders; that health care ought to be a “free” entitlement, paid for by government using other peoples money; and consumers, and the general public, are not smart enough  and do not possess enough government-generated data to make intelligent  decisions,  nor, for that matter, are physicians to be trusted to make decisions in the patients’ interests rather than their own self-interest.  Consumer-cost sharing, in other words, violates the principles of “trickle-down government, “ which holds that only paternalistic government has the wherewithal, expertise,  and compassion to decide what is best for you.  Never mind that HSAs grew by 18% in 2011,  their results satisfy employers and HSA-holders, and HSAs save money. In Indiana, more than 70% of state employees chose HSAs over traditional plans,  97% expressed satisfaction with the plans,  and saved the state over $20 million.The best hope for the U.S, to contain health care costs is to have consumers share in tax-advantage health savings accounts with money saved set aside for retirement.
Blapshemy Number Two -  Consumers, sensitized to costs by tax-advantaged health savings accounts,   contain costs because they are better judges of what is needed for their health and future retirement needs than federal officials.

Tweet:  Health costs soar because of effective treatment of  certain conditions: health savings accounts offer promise in containing these costs.