Incentives
Thursday, February 19 2009
I confess a moment of delight when I saw the headline in my RSS reader: Patient Power for Chronic Illness. Then I saw the byline: John Goodman, that guy who thinks anybody with access to an ER has health insurance.
Among his pet notions is the health-care savings account – HSA – as a way to give “consumers” more direct responsibility for paying for their healthcare. It’s one of those ideas that sounds great in the abstract, but runs into trouble when confronted with reality.
So you might understand how Goodman would latch onto any evidence that even hints at HSAs working in practice, and that’s exactly what he does here:
UnitedHealthcare is now using HSAs and health reimbursement arrangements (HRAs) to do something that almost never happens: aligning health incentives with economic incentives.
He explains that United is offering a program that tracks and monitors chronically ill people closely, then offers financial rewards if they comply with their treatment regimen. There’s one problem with his take: the program has nothing to do with HSAs. You can read the story Goodman’s cribbing from, but it’s pretty clear that HSAs aren’t part of the program. Goodman is either fudging – or illiterate.
Still, this is an interesting idea: pay patients to take better care of themselves, so that they don’t generate additional costs for the rest of the pool. Goodman is sorta right – the economic incentives and health incentives in our society are not well aligned – but he’s mostly wrong. The problem and the solution isn’t in how patients pay for their care, it’s in the care itself. Even a fully insured patient faces significant costs in our medical system – in the form of co-pays, deductibles, lost time, pain and discomfort, frustration, risk of serious injury, and so on.
That is to say, there are many, deep structural disincentives to staying healthy, and United’s plan won’t really solve those. (Neither will HSAs.) Reimbursement might help some folks stay healthier in the short run – and that would be a good thing – but in the long run, we really do need to fix the system.
