Market Pressure

You know those television commercials you always see these days about prescription drugs; often they are there putatively to raise awareness of diseases. Many people don’t even know they have a disease until they see these commercials. Of course, after they tell you about this illness, they advise you to ask your doctors about such-and-such medication.

This marketing technique has been adopted full-force by the big pharmaceutical companies in recent years, and it has worked. The drug industry has grown considerably and increases in drug costs are a large part of the reason for increases in overall healthcare costs. And part of the reason is that drug costs are largely invisible to many consumers: the insurance company pays for most of it except for a “co-payment”.

There’s broad agreement that patient pressure for the use of generic drugs, when medically appropriate, can curtail costs by offsetting sophisticated marketing by pharmaceutical firms. Such patient pressure is generated by potential impact on the family pocketbook. HSAs were introduced partly to create that pressure. If people shop for health care just like they shop for televisions or vacations, maybe the industry will become more efficient.

Critics claim that government policy encourages people to be less careful consumers when it comes to health care, and that if the government changed its policy, the number of people without coverage would shrink and the quality would increase. That is debatable, of course, but it is the type of thinking behind many of the libertarian think tank policies.

Market pressure. The market economy and the “ownership economy”. These buzzwords are relevant to the ideas behind HSAs.

Conservative pundit George Will wrote in May 2007: “Liberalism’s goal of achieving greater equality of condition leads to a larger scope for interventionist government…Hence their fear of Health Savings Accounts” Likewise, the conservative think tank Heritage Foundation is a an advocate of HSA, claiming in a 2006 article that HDHP insurance purchased in accordance with HSAs have seen decreases in premiums recently in contrast to conventional health insurance.

In an article called “Who’s Afraid of Personal Responsibility? Health Savings Accounts and the Future of American Health Care” Richard Kaplan suggests HSAs could bring about a “paradigmatic shift” in consumer attitudes about health insurance. He assesses the probably impact of HSAs according to “five C’s”

  • complexity of possible configurations
  • confusion over self-administration
  • choice of alternative arrangements
  • control
  • cost of health care.


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