Consumer-driven Health Care (HSAs) (market driven, still many rules)
Health Savings Accounts (HSA) are relatively new in the U.S. and are increasingly popular among certain segments of the population. "Consumer-driven health care," as it is called, is meant to spur competition, and thus lower costs, by causing patients to pay for most of their routine care out-of-pocket, which, in turn, will cause patients to "shop" for the best bargains.
Consumer-driven health care is a free-market approach to health care that, significantly different than traditional HMOs, asks the patient to pay full price for most routine care, rather than pooling or sharing risk with others. Similar to managed care, one must still choose an insurer, and these HSAs are simply one of the many plan options which can be chosen. They are typically called "high deductible" plans or "HSA-compatible" plans.
Consumer-driven health care is a potentially cost-saving option for some people, but there are at least two critical problems with HSAs. First, HSAs do not address the actual cost of health care. Rather than providing any incentives to health insurers to reduce costs, consumer-driven health care simply shifts the burden of payment from a pool of people to an individual.
The argument for HSAs is that they will indeed reduce actual costs because people will shop for the best "deals" thereby spurring competition. But, this is the second fundamental flaw with these plans. One does not shop for the best deal on a tetanus shot or the best deal on a hip-replacement surgery the way one shops for the best price on milk or eggs. First, this information is generally either not available or difficult to find (frequently bundled as in a "well child exam", for example), and secondly, even if it was available, people generally trust their physician’s advice and don’t "shop" for other prices or are not able, in the case of urgent/emergency care, to shop. Rather, the evidence clearly shows that when one pays for more care out-of-pocket, both unneeded and needed care decreases. A person is less likely to visit the doctor, even if they need to, when the cost of the visit is $150 compared with $10 or $15.
HSAs work for those who are healthy and relatively well-off, although research shows that even they will not seek some needed care. HSAs contribute to the fragmentation and costs of our current system and many people will be unable to afford their high deductibles leading to decreased health.