Alan Greenspan nicely teed up the "ownership society," presumed theme of George Bush's convention speech Thursday night. Mr. Bush will rightly emphasize the positive, but he'll be offering a way to deal with the pending crash of the welfare state, topic of the Fed chairman's widely noted talk last Friday.

Social Security reform, if Mr. Bush mentions it, would be a big kahuna in the eyes of the media. But, curiously, a potentially bigger kahuna is already in force, in the form of tax-shielded "health savings accounts," authorized for the masses in last year's Medicare bill.

The idea is to put the consumer in charge of most routine and everyday spending decisions, returning insurance to its proper role as protection against unpredictable, "catastrophic" expenses. The aim here, at long last, is to tackle the perverse tax incentive at the heart of our health-care woes -- the massive tax handout to employer-provided health insurance.

Mr. Bush has been selling HSAs on the stump for half a year, but nobody apparently listens to the president. HSAs went unmentioned at the Democratic convention, where acknowledging the dilemmas of unconstrained health-care inflation, let alone the potential solution, would violate the free-lunchism of the moment. Indeed, in a delicious episode in House Speaker Denny Hastert's new autobiography, he has Hillary Clinton opposing the Republican approach because Americans are "too greedy" to be trusted with their own spending decisions.

Right. Critics also said only the young, healthy and wealthy would opt for HSAs as just another way to shelter their incomes from taxation. Yet two early promoters of the accounts, eHealthInsurance and Assurant, found this year that more than one-third of their applicants were previously uninsured, two-thirds were over 40, and many were at the lower end of the income scale.

This is surprising only to those who never understood why the tax code was the problem in the first place. Notice that the typical family policy doled out by companies to their employees represents a total price-tag of about $9,086 a year. If you're in the top tax bracket, the effective after-tax cost to you is about $5,500. If you're in the working-poor bracket (i.e. pay no federal income tax), it's $9,086.

In fact, it's doubtful that such an insurance product would even exist in the marketplace in the absence of a massive tax subsidy, given the built-in incentives that naturally drive costs out of sight. Certainly you wouldn't buy gold-plated, first-dollar health insurance if you faced the full tab alone.

Yet even some who know better -- say, corporate America -- would rather lobby the government for more handouts than call for a restructuring of the tax incentive that causes all the trouble. The Big Three, for example, have had a fun time convincing a certain large, national newspaper that, because their health spending amounts to $1,400 per car, they're at a disadvantage to Japanese automakers, who don't pay for their employees' health care.

Oh yes they do. We all on average pay for what we consume with what we earn. That's true of health care, whether premiums are paid to a private insurer or taxes are paid to support a government-run system.

The Big Three have the same problem we all have: a tax code that waters and fertilizes a great deal of unnecessary, inefficient spending by beneficiaries that payers are at a loss to control. Fourteen hundred bucks per car -- that's roughly commensurate with health care's share of total GDP. No problem here. But consider that GM's health spending amounts to $14,000 per current employee and is growing at, say, 12% a year.

That translates into $1,680 per year that workers are taking home in additional compensation but don't know it and don't feel it, because the extra money is being hoovered up to maintain existing benefit levels.

Putting a lid on health-care inflation, which means putting a lid on the tax distortion that feeds it, would assuage a lot of social dissatisfactions about stagnant pay and "jobless" prosperity. Benefits managers have cottoned on and talk, without irony, of a "revolution" in health-care finance. JP Morgan and Cigna just teamed up to start offering employers an HSA-style insurance policy coupled with a debit card workers can use for their out-of-pocket spending.

Yet the idea is absent from Democratic thinking because Democratic economists and policy advisers have gotten the word that talking about individual incentives is somehow "Republican," thus verboten in party policy documents.

No serious person doubts that our overreliance on third-party payment is the problem that will be solved -- or will lead to a government-run, single-payer system that controls costs by denying care. In our information-rich economy, the medical industry doesn't even publish price lists. Is this not downright weird and a sign change is desperately needed? (The exception is cosmetic surgery, where, as health economist John Goodman points out, consumers pay out-of-pocket and competition has meant prices are flat or falling).

Some in the Bush camp were prepared to go deeper than even the HSA kludge, totally revamping the tax system. The idea was to help Americans shift their expectations: No longer will they send their tax money to government and hope government will take care of them in old age. Now they will have ownership of the assets that will take care of them in old age.