Health Savings Accounts Tied to High Deductible Plans – The Essence of the Best in Consumer-Driven Health Care

Consumption is the sole end and purpose of all production,and the interest of the producer 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

February 13, 2013 – It is generally acknowledged that the United States is the wealthiest nation on earth.  It is also acknowledged that this wealth stems from our consumer-driven capitalistic economy. Consumer spending makes up 70% of the GNP. This is true of every economic sector except for health care where the government makes up more than 50% of spending amd nearly 20% of the GNP.

So much for prologue.  A friend of mine, Donald Copeland, MD, of Cornelius,   North Carolina, a suburb of Charlotte, has long maintained, that in  health care, consumers, i.e,,  patients, guided by primary care physicians and nurses, are perfectly capable of spending their own money wisely. He believes the best economic vehicle for consumer-driven care are health savings accounts.tied to high-deductible health plans.

Here in outline form, are Dr. Copeland’s beliefs, as expressed in a talk before the National Academy of Family Physicians,in 2004.   His advice is still credible and long overdue..

CONSUMER DRIVEN HEALTH CARE:Health Savings Accounts and High Deductible Health Plans

What are Health Savings Accounts?

·         • A form of consumer-driven health plan

·         • Improvement in Archer MSA passed by congress in 2003

·         • A tax-sheltered account for medical expenses

 

Often called a “medical IRA,  the first IRA one should establish if eligible/Must be coupled with a High Deductible Health Plan (HDHP) -- $1.5K - $5.5K for individuals & $2.5K - $10.5K for families

How will HSAs – HDHPs affect my practice?

·         • Patients will pay from their HSAs until they meet their deductible.

·         • Co-pays are not allowed until the deductible has been met.

·         • Charges are established by the physician unless the patient’s HDHP (insurance company) has a contract with your practice.

·         • Very important to establish fees for non-insured and cash paying patients and to know what your allowable is with their insurance PPO.

Are HSAs good for my practice?

·         • The short answer: Yes, but with exceptions.

·          Imperative for patients to become informed and educated about the cost and quality of their health care prior to obtaining that health care.

Are HSAs good for my personal and employee health care coverage?

·         • Perfect for eligible physicians

·         • Good for employees – may consider an HRA or 125 plan

·         • Another way to build tax-free retirement funds

• Bonus: Now you can give professional courtesy and not reward the insurance companies

Are HSAs good for the practice of medicine?

·         • Depends on one’s personal philosophy

 What affect has Medicare had on the practice of medicine?

·         • America’s health care is at a fork in the road: Either total government control or patient (consumer) control…

·         • HSAs will not work unless patients are provided with quality care for reasonable fees.

·         • HSAs can help to preserve the private practice of medicine.

Can HSAs break the yoke of managed care?

·         • The short answer;–Yes, but this is highly dependent on physicians.

Will HSAs help family medicine?

·         • Yes

• References to read:

* Article by Dr. Douglas Lliff, Journal of Family Practice Medicine, September 2005

* Letters in Journal of Family Practice Medicine, November/December 2005

My message to young (less than 71 years of age) family physicians:

• You represent your patients in the health care system. Fight for a system that is best for your patients and it will be the best thing for you.

• Do not relinquish your responsibilities to others.

• Hold government and medical societies accountable. They represent you.

Doctor Copeland is a staunch admirer  Dr. Benhamin Carson, head of pediatric neurogsurgery at Johns Hopkins, who gave this piece of advice to President Obamas last week at the National Prayer Breakfast meeting:

Here's my solution. When a person is born, give him a birth certificate, an electronic medical record and a health savings account [HSA], to which money can be contributed, pre-tax from the time you are born, to the time you die. When you die, you can pass it on to your family members so that when you're 85 years old and you've got 6 diseases, you're not trying to spend up everything. You're happy to pass it on and nobody is talking about death panels. That's number one. Also -

For the people who are indigent, who don't have any money, we can make contributions to their HSA each month because we already have this huge pot of money instead of sending it to bureaucracy - let's put it into HSAs. Now they have some control over their own health care and what do you think they're going to do? They're going to learn very quickly how to be responsible. When Mr. Jones gets that diabetic foot ulcer, he's not going to the Emergency Room and blowing a big chunk of it. He's going to go to the Clinic. He learns that very quickly - gets the same treatment. In the Emergency Room they send him out. In the Clinic they say, now let's get your diabetes under control so that you're not back here in three weeks with another problem. That's how we begin to solve these kinds of problems. It's much more complex than that, and I don't have time to go into it all, but we can do all these things because we are smart people.”

 

Tweet:  The best solution for an affordable, compassionate, and workable health system in the U.S, is unversal health savings accounts, from birth to death, passed on to the next generation.