Great points by TNR's David Adler on HSA's:
The South African story, then, is a move from a noncompetitive insurance environment to a competitive one, but the competition wasn't by hospitals to provide the best or cheapest care, but rather among insurers to get the healthiest patients. Consumer-driven plans are central to this process, because they are ideal for "risk-selecting" the young and fit, who have flocked to the new plans. Not in need of expensive medical care, the healthy could watch their account balances grow, leaving the truly sick behind in traditional plans.
This particular type of competition--to attract the healthy--in turn led to price increases, because insurers had little incentive to control the prices medical providers charged. After all, it was no longer their problem. It was up to the patient to worry about costs, and the patient hardly had the same bargaining power as the insurers once did.[...]
The South African experience with consumer-driven health plans and medical savings accounts may soon be drawing to a close. In 2002, the country's Department of Health conducted an inquiry into the South African health system that, though nonbinding, has been influential and is expected to lead to change. Its conclusion: Savings accounts should be phased out of medical schemes. As its authors wrote, "The focus of health policy needs to be on risk-sharing and cost containment. None of these key health policy objectives can be achieved through medical savings accounts" (italics in original).
All great points. I'm going to be saying more HSA's in the next few days, particularly when I get around to blogging Jon Cohn's cover piece on them later. But Adler's story tells much of the tale. HSA's are a cost shifting device that lets employers push liability onto employees and insurers rip the healthy away from the sick. And since we're not in an integrated insurance system, our health structure simply can't sustain that.
