HSAs, Part III
Saturday, July 15, 2006 at 08:35AM A gentleman named Michael F. Cannon offered this response to my recent comments about HSAs. Mr. Cannon works at the Cato Institute and obviously has devoted a lot of time and thought to Health Savings Accounts. His viewpoints are well thought out and worth reviewing.
As I have tried to emphasize before, I am not morally opposed to HSAs. I just do not think they will improve health care in the United States. But as a doctor, I am above all an empiricist, and so I am willing to let the facts prove me wrong. I do not think they will, though.
There is one point Mr. Cannon makes I have to take issue with: He suggests that primary care medicine may not be cost effective. He sites an article in the New York Times as his only evidence. This article, which discusses research I am well aware of, says that annual medical checkups may be a waste of money.
I have never been an advocate of the annual physical, especially in healthy adults. The only routine testing a healthy young adult needs is occasional blood pressure measurement, a cholesterol check, and, for women. a Pap smear. Obviously none of these screenings necessarily require a primary care doctor -- a nurse may be sufficient. No, the annual physical is not the reason to have a primary care doctor.
Primary care doctors are needed because medicine is getting more and more complicated, and specialists are becoming more and more compartmentalized. A primary care doctor is like a financial advisor -- he is someone who can help you navigate all your options efficiently. Most people do not need to see a financial advisior every year (though some do), but having someone on hand who can help you identify your needs at key times is very important.
Everyone complains that health care is getting increasingly expensive. What is more cost effective if you have more than one medical problem, say, diabetes and high blood pressure, and you develop poison ivy -- to go to an endocrinologist, a cardiologist, and a dermatologist, or to go to a single doctor who can handle all three? Doctors who can address multiple medical problems at one office visit will certainly be more valuable to health cost control than those who specialize and are thus unable to address more than one thing.
It is also worth noting that PCPs are able to provide a lost art in medicine -- watchful waiting. Sometimes the best way to handle a medical problem is to observe it rather than take aggressive action. Treatment can be worse than the disease. Primary docs charge half or less of what specialists do and thus are in a position to perform serial evaluations of patients and look for changes in a patient's medical condition that warrant further workup.
It used to be that observation was one of the mainstays of medicine. Now everything is scanned, biopsied, and aggressively worked up because specialists find it easier to bill for expensive procedures than for recurring office visits. This shift away from observation towards aggression runs the risk of hurting patients, and is one of the casualties of the microspecialist system.
Reader Comments (3)
I think you forgot an important point to make. HSAs will force the lower middle class to chose between their own health care or their children's welfare, because there will still be signficant out of pocket expense for routine care (glasses, dentists, internists verses dance lessons, violin etc.). Their health care will be deferred in favor of their children's future. Eventually, many of their health care costs will snowball because they will develop chronic, debilitating diseases earlier (diabetes, heart failure, etc.) and lose their earning potential. This policy will increase the fiscal-social divide in this country. People are not stupid, that's why no one over the age of 40 chooses the option unless it's mandatory.
And of course, Mr Cannon does not address the poor other than to say that HSAs will not negate the need for entitlement programs...except that our executive politician wants to use it as a way to unburden businesses from health insurance, thereby increasing the numbers of uninsured and eventually swelling the ranks of the medicaid and medicare programs (depending on whether they stay employed and make it to retirement). Because everytime there's a policy change, a few more employee's lose benefits in the transition. In short, they're setting up the eventual armageddon that will bust these crucial entitlement programs.
It's not hard to believe that Bush could be that short sighted, but it really bothers me when articulate people write about these policies as if they are a truly viable solution.
I suspect it would not bother Mr Cannon if these entitlement programs disappeared and lowered his tax burden. I would really prefer it if he would be honest about his personal (and given the name of his site it may be his professional) opinions rather than couch them in debate that is (based on my intuition) deceitful and designed to be spun for public consumption.
Since you seem to have a nice relation with Mr Cannon, I suggest you continue the debate, ask him if he's willing to expand medicaid and medicare to take in those who eventually lose coverage because of HSAs. Let's see his real motives.
Libertarians believe in the smallest goverment possible and in leaving the rest to the power of free markets. I cannot fully embrace libertarianism because free markets operate on Darwinian principles, meaning that those who lose out or can't compete get to crawl off and die. Still, free markets tend to be very efficient, much more so than government programs and this is the appeal.
I guess all thinktankers are to some extent professional spinners. He scores some fair points for HSAs, but I think his argument breaks down for the reason I cited in my first essay -- why would anyone want to buy insurance that does not pay for anything? No one who has regular insurance and can afford it would be stupid enough to go to an HSA, and if you have no insurance at all the reason is because you can't afford the cost of medical care. Why in the world would anyone be able to afford to pay the first $5000 of their own health costs if they can't afford an insurance premium right now?
As I said, the consumer-driven model for cost savings is specious because individual buyers lack the wherewithal to get the best price. HMOs and big insurance companies negotiate, and negotiate hard for deep discounts for their services. As a doctor, I might bend to an HMO who offers me 100 patients for a 15% price cut but if a single cash paying patient calls asking for the same it is easy for me to say no. There is no bargaining power in a single person -- and that assumes the patient knows enough about medical billing to know what to negotiate for. That is a huge if.
I was just presenting an alternative point of view, since Mr. Cannon made his points nicely and without rancor. I like debate but his views have not changed my opinion one whit.
I really am a fiscal conservative too... until you cross the trigger point of my social liberalism. Some social nets add more value to our society than can be tallied by some accountant in a think tank. This is where liberterians are like the Dodo birds in the Ice Age movies. They follow the watermelon right off the cliff, instead of realizing that many of their ideas are good ones, if only they wouldn't try and force them into every extreme (and healthcare and drug legalization would be two categorize where they should draw a line). The should stick with the fair tax - that is a libertarian concept I can support whole heartedly.