Health savings accounts a new vehicle or merely a concept car?

By Leigh E. Rich

There’s a windy mountain road in Colorado, and as cars speed down one particular curve of the hill, accidents frequently ensue. Night after night, cars crash, metal bends, human lives are at stake.

The American solution to the problem? Build the trauma hospital near the scene of the accidents to facilitate access to life-saving care, says Dr. Bill Wright, a family practice physician in Denver and the associate medical director for Kaiser Permanente.

Wright, who also has a master’s degree in public health, is being facetious, of course, using the mountain road as a metaphor to illustrate that prevention, or primary care, is more cost-effective medicine. A better course of action might be to erect signage on the road, warning drivers of the perils ahead, or even to renovate the highway and temper the dangers with built-in safety features.

Unfortunately, especially when it comes to the culture of American medicine, “it’s a lot less fun and enticing to go back up the road” to pinpoint and prevent the cause, Wright explains.

And perhaps that’s one reason why the cost of health care in the United States is, like the carefree cars wending unsuspecting around the bends, so out of control.

Unlike other curves ahead, however, the blind spot known as the “health care crisis in America” should come as no surprise to anyone, unless you’ve been unconscious for the last several decades. There have been plenty of warning signs: a continual increase in longevity, costly and complicated billing procedures, changes in technology and the utilization of medical services, rising numbers of the uninsured and underinsured, and a post-World War II baby boom that’s nearing retirement.

Regardless, health leaders and lawmakers can’t seem to agree on the diagnosis, let alone a cure.

The current debate, state Sen. Shawn Mitchell, R-Broomfield, says, is “premised on the belief that the system is broken, totally broken.”

But “broken compared to what,” he asked at a town hall meeting in Arvada on March 2, where U.S. Rep. Bob Beauprez, R-7th CD, gathered with insurance and business leaders to discuss the potential of health savings accounts (HSAs).

Saying he wouldn’t want to live anywhere else in the world, Mitchell believes America’s health care system is, rather, facing some “serious challenges.”

“We simply can deliver and receive more health care than we used to.”

Wright agrees. “I think it’s semantic.”

But while the United States might offer the highest quality of health care in the world, a major problem exists in its delivery. “Maldistribution,” as Wright deems it, would likely be the scientific diagnosis.

And Wright says this distribution problem occurs both in terms of which patients have access to care as well as how many practitioners in certain disciplines are available. For example, he explains, America may have a sufficient number of total physicians, but there is a critical shortage in specialties such as primary care, internal medicine and geriatrics.

When it comes to nurses, the prognosis looks even worse. According to Wright, the average age of a registered nurse in Colorado is 47. And with the large baby boomer generation moving toward its twilight years by 2011, Wright says he’s concerned about whether we will have the workforce to take care of them.

“It’s like a python that swallowed a gopher,” he says, explaining America’s distorted demographics caused by the 75 million people born between 1946 and 1964—25 million more than during the previous generation.

Making matters worse, Wright says, “we have not replaced ourselves,” particularly since almost half of the subsequent generation have had only one child or none. “So do the math.”

Owning the health care gorilla

“The share of health care in the economy is going to increase,” Mitchell told the town hall gathering earlier this month. “That is unavoidable.”

But there may be some wiggle room in the rate at which it does.

Proponents of health savings accounts, like Wright, Mitchell and Beauprez, deem the tax-free creations established by President George W. Bush’s 2003 Medicare Prescription Drug Improvement and Modernization Act a “healthy direction” for America’s crippled health system.

With nearly half of the Medicare act dedicated to HSAs, the accounts are part of the Bush administration’s vision to move America closer to a true “ownership society”—creating patients who are more directly invested in the cost of their health care—and away from what Wright calls the gorilla in the room: “the entitlement culture of America.”

Similar to medical savings accounts that President Bill Clinton signed into law in 1996, supporters of HSAs—the newest breed of consumer-driven health care—are energized by initial numbers that include about 440,000 individuals, families and small businesses as “early adopters,” some of whom previously fell into the uninsured category.

But they’re not for everybody, as Beauprez emphasized twice during the town hall meeting.

According to Abby LaSala, a product development and management consultant for Kaiser Permanente, current HSA users are predominantly relatively healthy males who tend to be lawyers, accountants, insurance brokers or mortgage bankers—those who understand investment and are comfortable with financial risk.

Part of that risk is due to the limits the Medicare bill places on how much money may be contributed to an HSA in any given year, though contributions to as well as medically related deductions from the account are tax-free.

That’s “the real carrot,” Beauprez says, explaining such “tax avoidance” as a means for the government to incentivize increased ownership in health care.

Though Beauprez did not respond to inquiries regarding whether he is an HSA owner, he certainly feels passionately about the subject, describing for attendees at the town hall meeting the heated debate Congress endured “night after night” regarding the 2003 Medicare bill.

According to Beauprez, House Republicans had warned Senate Majority Leader Bill Frist, R-Tenn., that not including HSAs in the bill would have been a “deal-breaker.”

“It’s that big of a reform in our opinion,” said Beauprez, who deems HSAs “the beginnings of revolutionary reform” in health care.

In addition to being tax free, HSAs are portable and funds roll over from year to year, but they must and can only be coupled with high-deductible insurance plans. Owners of HSAs are then responsible for paying medical costs out-of-pocket until the deductible is met, after which health-related services are covered in part or in full, depending on the coverage provided by the insurance plan.

One criticism of HSAs is a bifurcation in the HMO or PPO market, as healthier individuals who use fewer medical resources can afford to remove themselves from that underwriting equation.

“The fear a lot of us have on the provider side,” Wright admits, “is fragmentation among the risk pool.”

Another concern is that patients may be less likely to invest in preventive care—which, in the long run, is more cost-effective and usually offers better prognoses.

Many high-deductible plans do cover preventive care, such as routine physicals, well women exams, well child care, prostate exams, cholesterol screenings, blood tests or sigmoidoscopies.

“So they’re not trying to discourage people from going to the doctor,” LaSala says.

But patients may not know what medical services are “discretionary” or which treatments are the most appropriate for them, and Wright warns that HSAs and other solutions won’t be successful without transforming how America delivers its health care.

A monster that requires reform

A supporter of HSAs, Wright says that “physicians do see there’s a crisis of affordability going on,” but he acknowledges that improvements in delivery must go hand-in-hand.

When patients have something to gain by becoming more involved in the cost sharing, he believes, they are often more amenable to exploring different medical options that might be available. In turn, however, “the impetus is on me” as the physician to explain alternatives and what care is truly necessary.

“I’m willing to have these conversations,” he says, “but it’s going to take time.”

Currently, one-on-one time with patients is a rare commodity, but Wright believes that technology—which can be a cost-driver in other aspects of health care—might be part of the solution.

Electronic medical records could help transform American health care, as long as the inefficiencies of paper records aren’t merely transported into the new technology. Instead, Wright explains, electronic records can enable practitioners to maximize care, providing access to the latest evidence-based guidelines at the point of care, prompting them to schedule preventive services, and reducing repetitive exams and tests.

Wright also envisions the doctor-patient relationship moving beyond just the one-on-one visit.

With technology-enabled solutions and the help of the information superhighway, he believes health care practitioners can conduct proactive outreach and “group visits”—for example, reminding patients to schedule check-ups or disseminating pertinent information to patients with similar illnesses—as well as answer some questions via e-mail or phone.

Instead of “just hammering out 25 visits” that provide little one-on-one time with patients, Wright describes his “ideal day” as divided along a more streamlined approach: handling less acute care by e-mail or phone; conducting group visits, rather than identical individual ones, for those with similar health concerns; and saving the one-on-one time for the six or seven patients “I really need to lay hands on.”

In addition to the primary physician, a multidisciplinary team that might include a nurse, a pharmacist and a health educator, for example, also could overhaul how the United States delivers its care.

And, not surprisingly, Beauprez adds “defensive medicine”—medical malpractice and tort law—to the list of reforms, another factor repeatedly highlighted in the 2004 election as driving up the country’s health care costs.

“Intuitively, (embedded) in the price of health care … is, I’m going to guess, a rather large amount to cover your you-know-what,” the congressman says.

And while there may not be one silver bullet that will solve America’s health care question, Beauprez touts HSAs as one choice in a buffet of options.

There are “lots of bullets out there,” he says, “perhaps none of them silver. … Let the individual shopper choose the box of cereal that best suits his flavor.

“We have to continue to slay this dragon however we can.” 

Rich, L. E. (2005, March 11). On the road to reform: Health savings accounts a new vehicle or merely a concept car? The Colorado Statesman, pp. 1–2, 11.