Joe Paduda on how various patients will react to consumer-driven health plans (HSA's, MSA's, and all the rest):
Catastrophic patients – about 5% of the population...are also not affected – they'll blow through their MSA account balance in a month or two, after which the insurance company or Medicare or Medicaid pays the rest. So, no funds out of their pockets, and realistically, no way for them to pay the huge costs of their health care. By the way, the top one percent of the population that falls into this category spends 40% of all health care dollars, the top five percent that falls into this category spends over 50% of all health care dollars.
OK, that leaves the medium users. The remaining part of the population consumes more than $1000 in health care (a typical MSA plan deductible), and therefore might be more influenced by finances than the other two groups. But there's a problem here. Studies indicate that a significant percentage of people with high deductible plans tend to not fill prescriptions, not seek care, and otherwise “under-utilize” health care due to financial reasons.
Well, their costs are constrained, at least for today. But what if they are not taking their hypertension medications and suffer a stroke? What if they don't get a mammogram and their breast cancer is not diagnosed until it is marginally “curable”? They'll become part of the top 5%, where costs are really uncontrollable.
The point? HSA's aren't going to change a thing. But you have to realize, reigning in costs and creating a more sensible system really isn't their aim. A few libertarians have messianic hopes for the structure, but HSA's, on sum, are meant to do two things:
• Offer Republicans a policy on health care. So long as Democrats kept pushing for universal care and manage care was collapsing, the right was left holding the bag marked status quo while voters were searching for anything but. HSA's gave Republicans a little-understood policy to tout as the answer to all our health care problems, and thus as the way to fix the system without increasing government involvement. Since no one really understood them they just muddled, and ended, the debate.
• Shift costs from businesses. Those companies that do pay health costs -- mainly dinosauric entities from the days when unions walked the earth -- were crying for government help, making them potent allies in the fight for single-payer. If they could somehow push their people onto HSA's, there's a chance they'd stop advocating for major change. This isn't actually working, but it seems to have been part of the initial plan.
So that's the better way to think of those. HSA's were never going to radically shift spending patterns, rather, they offered Republicans an ideologically-compatible policy that they could deploy to seem cutting-edge in the health care debate. They were a way to subvert the slowly-increasing agitation for universal coverage that began rising after managed care collapsed. And, to some extent, they worked. But they won't work for long.
