Friday, August 31, 2007

Health Savings Accounts - HSAs and The Entitlement Syndrome

I favor HSAs, and wrote about them at length in my book. (1). But HSAs are growing painfully slowly. The federal HSA law making them widely available is now nearly 4 years old. By 2007’s end, 8 million Americans will be in HSAs, a pittance compared to the more than 200 million that HMOs and PPOs cover.

Why the slow start? One can cite multiple reasons – distrust that HSAs simply shift costs, pundits claiming they’re a Republican gimmick, difficulties explaining how HSAs actually work, Americans’ natural resistance to radical change, suspicions HSAs will only benefit the healthy and wealthy, the prevailing orthodoxy you can’t trust the market to distribute or pay for health care, and deep belief HSAs won’t totally “fix” the health system. (2) I happen to agree with the latter, simply because no overarching policy – be it market or government driven – will ever totally “fix’ the system.

Chief among the reasons for the slow start is the “entitlement syndrome.” Thanks to third parties, we’ve been conditioned to think we’re “entitled” to free, first dollar, or low cost care from the government and health plans and the “dollar be damned.”

We’ve been taught there’s something special, even sacred about health care, something that separates it from other goods, something that shouldn’t be subject to market considerations relating to price, transparency, value, and quality. Not the least of these considerations is trust in doctors to do the right thing.

But what do health care professionals think about HSAs and the stress on price, market competition, and price transparency? That’s a hard to discern.

All I know is when I talk to hospital audiences about HSAs or consumer-driven care, I get collective yawns. And when I speak to doctors, I receive sometimes puzzled, sometimes appreciative, usually disbelieving looks. In Feb. 2007, the Minnesota Medical Association ran an article “Single Payer, Health Savings Accounts, or Managed Care.”

The article featured a poll asking 390 physicians which method they favored. The votes were single payer 64%, HSAs 25%, managed care 12%. Minnesotans, including doctors, tend to have a collectivist mentality, and this small survey may not represent the feelings of physicians as a whole But, at the very least, it shows HSA proponents have a long way to go in convincing doctors HSAs are for real.

1. Innovation-Driven Health Care; 34 Key Concepts for Transformation (Jones and Bartlett, 2007), chapter entited “Health Savings Accounts; Wall Street, Health Plan Websites, and Preventive Services”

2. “Analysis: HSAs Wont Cure Health Care ‘Crisis,’ Denver Post, August 29, 2007, see complete analysis at Bell Policy Center’s blog,


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