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On the Third Hand: HSAs

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Amelia Haviland and three colleagues say getting about half of group health plan enrollees into health savings account (HSA) programs could save about $57 billion per year.

Haviland, a statististician at Carnegie Mellon University and an adjunct statistician at the RAND Corp., Santa Monica, Calif., and her colleagues make that case in a new paper published behind a pay wall (sorry) at Health Affairs. 

The Haviland team contends that giving consumers skin in the game by increasing deductibles makes the consumers better health care shoppers and dramatically decreases costs.

The percentage of group plan enrollees offered an HSA-compatible high-deductible plan or a program that includes a health reimbursement arrangement (HRA) has increased to 13% this year, from 4% in 2006.

That growth in use of health account plans has occurred as health insurers have reported being surprised by an unexpectedly rapid decrease in health care spending.

My personal experience is that, at this point, putting consumers in HSAs is like putting them at the mercy of wolves with medical degrees.

To back up: I LOVE the HSA concept. My parents taught me that the sensible approach to insurance is to have some savings to cover everyday expenses and buy insurance with a fairly high deductible. 

I was doing my best to find out what the full cost of my health care was from the beginning. 

The truth is that I find I can actually be a pretty good health care consumer in some limited circumstances. I can figure out what a dental exam will really cost both me and the insurance company. I can figure out what care from a nurse practitioner in a walk-in clinic will cost.

But, even though I’ve written about personal health accounts since the days of medical savings account pilot programs, and even though I’ve written articles about the value of health care transparency, I have no ability to figure out what care from actual medical doctors will cost.

Aside from the fact that figure out what either the full billed rate or the discounted in-network rate will be, I find it’s impossible to know what will be in the bill. Before Medicare went after the “integrated health care system” my husband and child use for care for billing fraud, I had a hard time understanding that we were being defrauded. I just thought there must be some complicated medical reason that I didn’t understand why checkups were billed as sick visits.

Of course, the complicated medical for all the sick visit bills was fraud.

The doctors and hospitals upcode mercilessly, without the health care system providing any effective, straightforward path for consumers to talk to a halfway knowledgeable medical billing person let alone negotiate.

Non-grandfathered health account plans now bundle the cost of preventive care into the cost of the plan. In theory, a high-deductible plan enrollee will pay nothing to get a checkup, but, in reality, the upcoding game seems to turn every checkup into a sick visit.

The patient ends up with an incentive to say phooey on conventional medicine and question whether the group health plan has any value whatsoever.

A patient might have no claims expenses in a quarter, and no use of conventional professional medical care of any kind during the quarter, because she decided that taking Ibuprofen for a 104-degree fever and lower back pain was a lot less daunting than the idea of dealing with the medical bills that would result if she went to a physician and survived to see the medical bills.

On the one hand, doctors have successfully persuaded members of Congress and regulators that insurers are economic goons. Maybe, from the doctors’ point of view, there’s some justice to that.

On the other hand,  insurers have to figure out how to bite the bullet and remind us of what we used to know back in the 1970s: That, from a financial perspective, the doctors are also a bunch of greedy goons and give the patients tools to deal with medical goondom. Assuming that patients will immediately understand that they’ve been misbilled and have much luck dealing with the misbilling under current conditions seems overly optimistic.

On the third hand, doctors and hospitals bill the way they do because the health care finance system is working poorly, Care providers are responding to demands to supply what seems to be an unreasonably huge amount of care for an unreasonably low amount of cash at least partly by pushing the pay up a bit, rather than relying entirely on providing less care than the patients want. To some extent, when patients push back, call to be huffy with the doctor’s receptionist, then go on to write angry blog entries, that’s a sign that health account plans are working and getting patients riled up about what riles insurance companies up.

But I think letting market forces work in that, when the market itself is so messed up, is that it gives patients who are bit tight with money to be complete penny-wise, pound-foolish idiots. 

What I think the country needs if it’s going to turn health account plans into a mass-market product:

1. Widespread access to special credit cards designed for people who may need to pay high out-of-pocket costs associated with high-deductible plans. In the old days, when dogs could get credit cards, access to health bill credit was not really an issue for anyone except for hardcore deadbeats who clearly should not have access to any additional credit. These days, in the wake of the credit crunch, people who have paid their bills on time for decades and rarely carried a credit card balance over from one month to the next may find themselves with a $500 credit limit and no easy way to get a new card.

2. Clearly written, clearly posted rules for distinguishing between checkups and sick visits. Hint: Even if you’re a little bored with papers about value-based insurance design (VBID), if you want people in high-deductible plans with, say, obesity or high cholesterol and no other noticeable symptoms to get checkups and take anti-cholesterol medications, don’t let the total out-of-pocket cost of their annual office visits be $400. Maybe punishing people for having high cholesterol by making their office visits cost $50 more than what healthy people pay makes sense, but letting the out-of-pocket costs go too high may cause the patients most likely to benefit from preventive care to rely on crossing their fingers as their main strategy for maintaining wellness.

3. Some kind of Web-enabled, semi- or completely automated patient advocacy programs. Having a topflight health advocate intervene personally over a checkup that was billed as a $200 sick visit probably does not make much economic sense. But requiring every patient to be a great bargainer to get a fair deal doesn’t seem to make that much sense, either. If I were a great bargainer, I’d be a businessperson or a trial lawyer, not a reporter. But, right now, it doesn’t seem as if there’s anyone out there that I can hire to represent me in routine health care fee negotiations. Maybe there could be some kind of app for that.