Tuesday, August 23, 2005

DOI vs CDHC (Part 1)...

Recently, California’s Insurance Commissioner blasted consumer driven health care in general, and Health Savings Accounts in particular. Commissioner Garamendi claims that these “skeletal” policies will:
-Put the entire health insurance system at risk (yikes!)
-Cause patients to forego needed care
-Increase cost shifting
-Exacerbate loss of benefits
-Make the health system more complex
-Result in inefficient use of resources
-Increase inequities in access
-Raise your cholesterol
-Increase global warming
Okay, I threw those last two in to see if you were paying attention. Seriously, though, it’s these “the end is near” doomsday scenarios which bureaucrats like Commissioner Garamendi bandy about that cause them to lose credibility, since they are so easily debunked. Let’s examine (and put to bed) each of these claims one by one:
Put the entire health insurance system at risk” Putting this one first was probably a bad strategy: after all, if you’ve already destroyed the whole system, then the rest of these objections seem fairly paltry. About 15 years ago, when MSA’s first came out, the then-president of a large health insurer wrote a whole book about what a catastrophe Medical Savings Accounts would be, and that their very existence threatened to destroy the health care system as we knew it.
Sound familiar? Well, as we can see, the industry, and the country, survived our experience with MSA. The truth is that the concept of consumer driven health care is one of personal responsibility and choice: if one doesn’t care to participate, one is free to choose from amongst many other health insurance options.
Cause patients to forego needed care” If anything, CDHC plans encourage folks to take care of themselves: if you’re spending your own money, then you want the most bang for your buck. And we already know that it’s cheaper to see a doc than visit the ER. Or the ICU.
Increase cost shifting” Coming from someone in the gummint, this one is pretty funny. After all, when it comes to cost-shifting, there is no bigger culprit than Uncle Sam (or Uncle Arnold, etc). Between Medicare and other government programs, the private sector really takes it on the chin. The problem here, though, is that it’s a red herring: the type of plan one has doesn’t dictate what costs – if any – get shifted. The Commissioner’s beef seems to be that providers will get stiffed on uncollected deductibles and co-insurance. He makes no attempt to bolster this claim with any hard numbers.
In Part 2, we finish out the list, and look at how CDHC is actually improving the system.
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