Thoughts on Health Savings Accounts
One of Bush's proposals for the health care system is to encourage "Health Savings Accounts" combined with high deductible health insurance.
The idea is that people will pay for their routine medical bills out of "pocket" through tax-sheltered savings accounts, and rely on insurance only for catastrophic events. The point is that people will pay more attention to their health care spending because it's not automatically tossed to their insurance, reducing health care spending (the US spends far more as a percentage of GDP than most first world countries).
Two bits of this perplex me, one of which is medical and the other economic:
1. Since people are paying "out of pocket" for non-emergency care, chances are that preventative medicine in general will not be nearly as consistent. Routine colonoscopies, pap smears, mammograms, and other techniques which very well may save money (and lives) in the long run (it's much cheaper to treat cancer at an early stage) will not occur. ER visits for conditions which could have been treated in advance at a fraction of the cost are a parallel concern.
2. Since people will be socking away money in these savings accounts, that money may very well be moving out of the economy. Money spent on health insurance pays salaries, buys equipment, buys supplies, and takes part in growing the economy. Money in savings accounts is "unemployed." (though it could be invested by the institution holding it to negate this issue).
The idea is that people will pay for their routine medical bills out of "pocket" through tax-sheltered savings accounts, and rely on insurance only for catastrophic events. The point is that people will pay more attention to their health care spending because it's not automatically tossed to their insurance, reducing health care spending (the US spends far more as a percentage of GDP than most first world countries).
Two bits of this perplex me, one of which is medical and the other economic:
1. Since people are paying "out of pocket" for non-emergency care, chances are that preventative medicine in general will not be nearly as consistent. Routine colonoscopies, pap smears, mammograms, and other techniques which very well may save money (and lives) in the long run (it's much cheaper to treat cancer at an early stage) will not occur. ER visits for conditions which could have been treated in advance at a fraction of the cost are a parallel concern.
2. Since people will be socking away money in these savings accounts, that money may very well be moving out of the economy. Money spent on health insurance pays salaries, buys equipment, buys supplies, and takes part in growing the economy. Money in savings accounts is "unemployed." (though it could be invested by the institution holding it to negate this issue).