HSAs, tort reform top health agenda
■ Some physicians like the emphasis on personal responsibility, but others worry unknowledgeable patients might skip care and that educating them would be time-consuming.
By David Glendinning — Posted Feb. 20, 2006
Washington -- In his bid to promote more efficient spending of health care dollars, President Bush is trying to get patients to have more skin in the game.
The White House released a proposed fiscal year 2007 budget this month that would commit billions more dollars toward persuading people to embrace health savings accounts over more traditional types of insurance.
By opting to purchase high-deductible plans coupled with personal HSAs, patients would be encouraged to use medical services more judiciously, the Bush administration said.
The concept of encouraging patient responsibility and empowerment through such consumer-directed care emerged as a major theme of this year's White House health agenda. "As people spend more money over which they have discretion, they're going to be more concerned about spending it wisely," said Allan Hubbard, director of the White House's National Economic Council.
For this reason, the American Medical Association approved of the HSA expansion Bush proposed in his Jan. 31 state of the union address.
"Consumer-driven health care encourages patients to take a greater interest in their health care and how they spend their health care dollars by putting patients in the driver's seat," AMA President J. Edward Hill, MD, said after the speech.
"The AMA believes that health savings accounts empower patients to have greater control over their health care decision-making and are an important choice in the health insurance mix."
The administration's budget puts a lot of faith -- and money -- into the accounts, which tripled in enrollment to roughly 3 million people in the past year. Bush's proposal to enhance the plans' tax benefits, increase yearly contribution limits and make the plans more portable would cost the federal government more than $5 billion dollars in 2007 and nearly $60 billion over the next five years.
All HSA spending on out-of-pocket expenses would become tax-deductible, and annual contribution caps would rise this year to $5,250 for individuals and $10,500 for families, up from $2,700 and $5,450, respectively.
Patient risks, doctor headaches?
Consumer-directed insurance models such as HSAs are not for everyone, some physicians said.
"The academy agrees with President Bush that health savings accounts can be an important component to broaden health care coverage, particularly at the level of preventive services," said American Academy of Family Physicians President Larry S. Fields, MD. "Unfortunately, this can only be a viable option for some of our citizens."
In many cases, more responsibility over health care spending through greater exposure to out-of-pocket expenditures does patients more harm than good when it comes to keeping up with needed preventive care and health maintenance, said Mark Fendrick, MD, professor at the University of Michigan Medical School and co-director of the university's Center for Value Based Insurance Design.
"When you make people pay more for things, they'll buy less of it," he said. "And unfortunately, what this means in health care is that while they'll buy less of the things that we maybe don't want them to buy, they'll also buy less of the things that we really do want them to buy."
Giving patients more of a stake in their health care dollars in an attempt to limit the use of upper gastrointestinal endoscopies, for example, will not benefit patients if they are similarly dissuaded from getting colonoscopies, Dr. Fendrick said.
Consumer-directed insurance products will do little good for patients if they do not receive enough help from their physicians in determining where they should be spending their medical care dollars, Hubbard acknowledged.
"The frustration that we've heard from the people with HSAs is that ... they don't have the information they need to be good consumers," he said. "That's why the president is going to be talking about this and working with employers and insurance companies ... to insist that providers provide this information."
All of this could add up to more work for physician practices, many of which would not relish the prospect of being required to coach unprepared patients or hire outside help to do so, said James Pope, MD, chief medical officer of Healthways, a care management firm in Nashville, Tenn.
"The part that is less welcome from the physician's perspective is that consumer-directed health plans will activate individuals that are largely health-illiterate," he said. "Many physicians are not as prepared to provide the level of information necessary for these health care consumers to participate in a meaningful way."
Focus stays on liability reform
Empowering patients is just one piece of a plan to improve the health care system, Bush said. "For all Americans, we must confront the rising cost of care, strengthen the doctor-patient relationship and help people afford the insurance coverage they need," he said in his address to Congress.
Medical liability reform in the form of noneconomic damage caps continues to be a major White House priority. Bush illustrated the perceived impact of high liability insurance premiums for physicians by noting that nearly 1,500 counties in the United States do not have an obstetrician-gynecologist.
Enacting meaningful medical liability reforms is the AMA's "top legislative priority," Dr. Hill said. "We applaud President Bush for calling on Congress to pass medical liability reforms this year."
America's Health Insurance Plans, which also supports reform, recently released a study by PricewaterhouseCoopers estimating that 10% of increases in patients' premiums are attributable to the cost of litigation and defensive medicine.
The House has approved noneconomic damage caps several times, but the Senate has not followed suit.