NCPA - National Center for Policy Analysis


October 1, 2007

Health insurance is an institutionalized, bureaucratized market that is heavily influenced by tradition and the fact that normal market forces have been suppressed, says John Goodman, president of the National Center for Policy Analysis.

One thing that would help loosen things up, he says, is liberalizing the laws for health savings accounts (HSAs):

  • Currently, HSAs are limited to people with high-deductible policies; but if they were widely available, they would confer more choices -- and more consumer buying power.
  • For example, a person slated for a $50,000 surgical procedure may want to have it done in a different city even if it costs more.
  • If the patient had money saved in an HSA, it would provide more flexibility; once millions of people began using HSAs, doctors won't think it's so odd to be asked for prices.

Health insurance that allows patients to pick providers would also help lower costs in chronic care, which generates the highest costs in health care, says Goodman.  Currently, insurance pays by task and care is fragmented.  A diabetic, for example, must visit many different providers.  Once a real market comes into existence, patients would be able to shop around.  Full-service diabetic centers would compete for business.

Source: E. Thomas McClanahan, "Health savings accounts would boost patients' choice," Kansas City Star, September 29, 2007.


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