The president's prescription for our ailing health care system is, astoundingly, to encourage the further deterioration of private insurance coverage for those in the middle class who have become increasingly worried about holding onto their current policies. The president's diagnosis seems to be that the nation suffers from too much health coverage, rather than from the huge gaps in coverage that most of us worry about.
Let's be clear about the administration's "health savings account" proposal. Commentary has focused on what is given, not what is taken away. Taxpayers would become eligible to place thousands of dollars in a tax-free health savings account, but only if they and their employers abandon their current comprehensive health care policies and substitute much cheaper policies with very large deductibles. This would leave currently insured people fully exposed to health costs up to this deductible amount, potentially eating up their savings and then some.
We should take a moment to look at how such a proposal would affect our fellow citizens, and then address the question of why the administration would advance such a proposal.
As to the impact of health savings accounts, the president's prescription would be yet another soothing ointment for the rich and healthy, and a poison pill for the poor and sick. Why? Well, if you are rich and healthy, you can afford to put away thousands of dollars a year, you can benefit from yet another tax break, and you may not have any health expenses, allowing the account to grow. If, on the other hand, you are poor and sick, you likely won't be able to afford to put the money aside, won't benefit from the tax breaks, and would have to spend on health costs any money you might have managed to save.
In addition, employers would be off the hook for basic health care costs, and healthy people would leave the broader health insurance pool to move to limited coverage. As healthy, wealthy people scrambled after this latest tax break and employers heaved a sigh of relief, only the sick would seek comprehensive coverage—driving up its cost and making it increasingly unaffordable.
Why would the administration prescribe such a health plan? The basic belief is that high-deductible health plans, often called "consumer-directed" health plans, would bring down health care costs by forcing patients to use their own money for basic health needs and therefore have more "skin in the game." This, the rationale goes, would cut back on the frivolous use of health services.
There are two flaws to this logic. First, a golfer's desire for an MRI to diagnose the cause of an achy knee may or may not be frivolous, but a basic medical intervention for a sick child is unlikely to be frivolous—or the reason for rising health care costs.
Second, it is important to remember that only 10 percent of people account for 70 percent of our nation's health care costs. These 10 percent of our fellow citizens are already very sick, and with due deference to the market economists, already have plenty of "skin in the game." Someone who is told that he or she has lung cancer is not likely to be a cost-conscious shopper. These so-called "consumer-directed" plans would have only the most marginal impact on the 70 percent of costs incurred by very sick people.
Rather than blaming patients and consumers for rising health costs, the administration should work with providers and insurers to increase use of information technology and pay-for-performance systems that reward efficiency and quality while penalizing inefficiency and poor care. Rather than encouraging rollbacks of health insurance coverage, the administration should put forth credible proposals to help the millions of uninsured and underinsured people.
James J. Mongan, M.D., is president and CEO of Partners HealthCare in Boston. Dr. Mongan served for 12 years in Washington as a staff member of the Senate Finance Committee, assistant surgeon general, and associate director of the Domestic Policy Staff in the Carter White House. In addition to his role at Partners HealthCare, Dr. Mongan also serves as chairman of The Commonwealth Fund's Commission on a High Performance Health System.
The views presented in this commentary are those of the author and should not be attributed to The Commonwealth Fund or its directors, officers, or staff.