Written by Bernie Saks MD

The Intelligent HSA

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Gail Shearer, Director Health Policy Analysis
Washington Office
Consumers Union

April 1, 2009 

Re: The Intelligent HSA

Gail: thank you so much for taking the time to speak with me yesterday about health care reform.

I am including several attachments including the position paper to Tom Campbell when dean at UC Berkeley Haas Graduate School of Business and his reply. Tom is now running for Governor of California.

The Intelligent HSA will be effective in controlling cost when used in a setting of Universal Care. Utilization, when controlled externally is called rationing and when controlled internally is called conservationism. The Indemnity health insurance model will never control utilization because money is taking from employees prior to services being rendered and the patients therefore wish to get the most services for their health care dollars while doctors are glad to provide services so long as being reimbursed for them. Patients will never see a dividend from the insurance carriers should they be savvy consumers. 

In "The Intelligent HSA" in an Universal setting the patient is rewarded immediately and directly for being a cost conscious consumer.

The argument of adverse selection (and cherry-picking) in HSA's is moot in a Universal Care setting and can only be made in a voluntary health insurance marketplace. Once we enter the realm of Universal Coverage we need to rethink what is the best business model. Indemnity insurance and its inability to control utilization without rationing is not the best model.

If HSA's and their associated HDHP's are funded completely for the individual by employer mandate and/or government taxation the argument of COST TO THE INDIVIDUAL becomes moot if the plans are fully funded. Then the focus of health care can shift to SAVINGS AND REWARD TO THE INDIVIDUAL for healthy lifestyle and appropriate utilization. The argument of upward premium spirals for low deductible plans becomes moot if HSA's/HDHP's are applied in a Universal Care setting.

The Intelligent HSA plan includes an independent medical advisor to remove the conflict of interest in cost conscious decision making within the doctor patient relationship in the current indemnity models. 

If the regional HDHP provider is also included in the model then there is the added benefit of reducing costs by reducing redundancy in administrative services, as well as the benefit of providing portability and total doctor accessibility to the patient.

There is no one variable that, by itself, if changed will solve the Health Care crisis. However, if Universal Care is adopted while shifting to fully funded HSA/HDHP's, a medical advisor independent of the doctor-patient relationship and a regionally out to bid HDHP provider, issues of cost containment, appropriate utilization (without rationing), administrative redundancy, portability and accessibility will all be adequately addressed. 

I have been discussing this model with Tom Campbell and would appreciate your consideration and feedback regarding this proposal. The attachments should take you no more than ten to fifteen minutes to read.  I look forward to speaking with you again. If you are no longer the agent at the Consumer Union who deals with this arm of Health Reform, I would appreciate you forwarding this packet on to the appropriate person(s) or if providing me their names, I shall personally contact them.

Warm Regards,
Bernie Saks, MD