(c) Wiley Long - All Rights reserved

Consumer-driven health care has the potential to be apowerful force of change in the health care system. Byinstituting competitive pressures, encouraging greater pricetransparency, and rewarding consumers who are pro activeabout their health, the growing adoption of Health SavingsAccounts will help make health care more affordable foreveryone.

In an article entitled “Health Care in the 21st Century”,published in the New England Journal of Medicine on January20, 2005, Senate Majority Leader Bill Frist, M.D., madeseveral suggestions on ways to provide all Americans withlifelong, affordable access to high-quality health care. Senator Frist graduated from Harvard Medical School in 1978,and was a surgeon before entering politics. One of the keyaspects of his vision is a system that is responsiveprimarily to individual consumers, rather than to third-party payers. This concept is known as consumer-drivenhealth care.

Today most health care is paid for and controlled by thirdparties such as the government, insurers, and employers. Consumers rarely compare prices or quality of service whenshopping for health care – partly because this comparison isusually very difficult or even impossible, and partlybecause the price often just doesn’t matter to the consumer,who is only responsible for a moderate co-payment. Fristnotes “a consumer-driven system will empower all people – ifthey so choose – to make decisions that will directlyaffect the most fundamental and intimate aspects of theirlife – their own health. This empowerment gives people agreater stake in and more responsibility for, their ownhealth care. Health care will not improve in a sustainedand substantial way until consumers drive it.”

A key aspect to enabling consumer-driven health care was thecreation of tax-free Health Savings Accounts (HSAs). Thislegislation was part of the Medicare Modernization Act(Public Law 108-173). “HSAs, coupled with affordable highdeductible insurance policies, give individual consumersmore control over their health care choices and hard earneddollars. HSAs give people a greater stake in their ownhealth care. The accounts can move with employees from jobto job and can be rolled over year to year. HSAs shouldincrease demand for greater information and transparency.”

What Senator Frist is suggesting is that people with highdeductible health insurance plans and HSAs have incentive tokeep their health costs low, since any money they save onhealth care expenses stays in their Health Savings Account,and grows tax-deferred, like an IRA. Thus there is alsoincentive for the consumer to demand information abouthealth care pricing. No system has yet been devised in thehistory of mankind that does more to increase quality andlower prices than a competitive market system. As more andmore consumers begin to own health savings accounts, healthcare providers will be forced to compete for their businessby providing better quality service and better prices.

The other factor in play is the financial motivation theindividual will have to stay healthy. The vast majority ofhealth care spending today is due to degenerative diseasessuch as high blood pressure, diabetes, metabolic syndrome,cardiovascular disease, and other modern ailments that areprimarily the result of lifestyle choices. The consumer whowisely spends his HSA dollars on preventative care (whichcan be done tax-free) and pays attention to diet andexercise could be rewarded with a substantial amount ofmoney in their Health Savings Account by age 65.

Consumer-driven health care has the potential to be apowerful force of change in the health care system. Byinstituting competitive pressures, encouraging greater pricetransparency, and rewarding consumers who are pro activeabout their health, the growing adoption of Health SavingsAccounts will help make health care more affordable foreveryone.

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Take control of your health care and build a retirementnest egg at the same time with a NEW Health Savings Account!
- Wiley Long is President of HSA for America, the mostcomplete and comprehensive site on Health Savings Accounts.Visit HSA for America at:
http://www.health--savings--accounts.com

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Author's Bio: 

Name: Wiley Long
President - HSA for America
Company: HSA for America
2261 Shawnee Ct.
Fort Collins, CO 80525
Phone: (866)254-5121
URL: www.health--savings--accounts.com