Monday, December 4, 2006
Ezra Klein does yet another excellent job discussing the economics of the Health Saving Accounts. He notes that the cost savings from these accounts are not quite what some might think. He states,
I'll take the posting of the latest Health Wonk Review to belatedly respond to Bryan Caplan's snarky argument that HSA's will too bring down the costs of health care, because it's basic economics. Much of his post relies on some analogy about traveling to China, but I tend to think chemotherapy is different from jaunts to Shanghai in obvious enough ways that it's not a terribly useful metaphor. . . .
Now, Bryan isn't a health care expert, he's an economist, and from that perspective, what he's actually arguing is correct: If you make people pay a lot of money for their health care, they'll use less of it. The problem is, HSA's don't do much of that for the costliest patients -- they save money on low level treatments, disincentivizing an array of basic care services.