Medical savings accounts could replace managed care

When Medical Savings Accounts (MSAs) were first introduced in America 10 years ago, they stirred up a fuss – and took a back seat to the concept du jour, managed care, which it was thought would control costs and deliver optimum health care.

Ten years later, patients believe managed care saves money by depriving them of services they want and need; physicians believe it prevents them from providing the best care; and employers realise it hasn't saved money – just delayed cost increases for a few years.

For the same reasons managed care hasn't worked, Medical Savings Accounts and other consumer-driven programmes are attractive:

MSAs reduce the influence of third-party payers in the health care system, while managed care makes the third-party payer the predominant actor.

MSAs allow patients to pay more to see a better doctor, while managed care tends to pay all participating doctors the same, regardless of their skill.

MSAs help reduce costs by lessening the administrative burden on everybody, while managed care greatly increases the amount of health care dollars that are devoted to administration.

MSAs work to restore the patient to a position of influence in the health care system, while managed care leaves the patient as a passive recipient of other people's decision-making.

MSAs help to restore the patient/physician relationship, while managed care weakens those relationships – and encourage innovation in health care while managed care encourages "cookbook" medicine.

Finally, MSAs greatly reduce soaring administrative costs; control expenses from the demand side; encourage people to seek preventive care; control low-cost routine expenses (something managed care does not do very well); and – contrary to their detractors' statements, don't pull the healthy out of the market.

Source: Greg Scandlen, MSAs Can Be A Windfall For All, Backgrounder No. 157, November 1, 2001, National Center for Policy Analysis.

For text http://www.ncpa.org/pub/bg/bg157/index.html
For more on MSAs http://www.ncpa.org/iss/hea/

FMF Policy Bulletin\13 November 2001