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Wednesday, April 05, 2006

Unintended Consequences

President Bush is making a big thing out of his Health Savings Accounts, or HSA’s. For the benefit of those who have been hiding under a rock somewhere for the past few years, An HSA is a fund, owned by you, to which you are allowed to make tax-deductible contributions, provided you use the money to pay your medical bills. You must also have a health insurance policy that has a high annual deductible. (People on Medicare are not eligible.) Anyone interested in knowing more should go to http://www.ustreas.gov/offices/public-affairs/hsa.

This is the Bush free-market approach to health care reform. The idea is that people who pay their medical bills with their own money will make wiser decisions about the use of services. In addition, they presumably will shop around for care, thereby causing health care providers to become more efficient.

HSA’s are clearly good for the banks and other financial institutions that hold the money, but I include myself among the skeptics who doubt that they will have much of a direct effect on the health care economy. Individual patients simply do not have enough financial clout to put economic pressure on providers.

There may, however, be an unintended consequence. In the process of paying their own bills, HSA owners may become more aware of the cost of care and of the inefficiencies of the health care system. If so, they may become more supportive of health care institutions and executives who try to do something about it.

That would be positive, no doubt about it.

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