from Scott Atlas at The Wall Street Journal, The Health Reform That Hasn’t Been Tried
A second tool for motivating patients to consider price is large, liberalized health savings accounts. These tax-sheltered accounts are generally used to pay for the noncatastrophic expenses that form the bulk of medical care. Better than tax deductions, HSAs introduce something unique—an incentive to save.
When people have savings to protect in HSAs, the cost of care drops without harmful effects on health. A study two years ago that analyzed data from 2003-07 showed that the spending of patients with HSAs and high-deductible plans decreased by 15% a year. If even half of Americans with employer-sponsored insurance enrolled in this kind of coverage, U.S. health expenditures would fall by an estimated $57 billion a year, according to a 2012 study in Health Affairs.
HSAs should be available to all Americans, including seniors on Medicare. Given that seniors use the most health care, motivating them to seek value is crucial to driving prices lower. Life expectancy from age 65 has increased by 25% since 1972, meaning Americans need to save for decades of future health care. Raising maximum HSA contributions, now $3,400 a year for an individual, to at least match the limit on individual retirement accounts of $5,500 a year, is one important step. When a person with an HSA dies, the funds should be allowed to roll over tax-free to surviving family members. HSA payments should also be permitted for the expenses of the account holder’s elderly parents.
The information that patients require to assess value must be made radically more visible. A 2014 study on magnetic resonance imaging showed that price-transparency programs reduced costs by 18.7%. The most compelling motivation for doctors and hospitals to post rates would be knowing that they are competing for price-conscious patients empowered with control of their own money.