1. A central focus of this conference is the problems of the uninsured (and underinsured)
47 million uninsured in 2006
18,000 Americans die each year from lack of insurance
Results in financial distress and disaster for many Americans

2. But some argue a more important problem is “overinsurance”
The “consumer-driven health care” movement contends consumers must become responsible for health care purchasing
Consumers purchase too much health care now because they have too much insurance, and insurance reduces the cost of health care causing moral hazard

3. Insurance is necessary, but
Only catastrophic insurance is really needed
High deductible health insurance policies (HDHPs) should be accompanied by health savings accounts (HSAs)

4. HDHPs coupled with HSAs will
Limit consumer purchases to truly necessary care
Create competition at the point of sale of health care items and services
Encourage consumers to shop for quality and price
Make health insurance more affordable
Bring down cost while improving quality and access

5. The Medicare Modernization Act
Tax exclusion to employers and a deduction to employees for funds contributed to an HSA.
HSA must, however, be coupled with a HDHP
Deductible of at least $1100 a year for a single individual or $2200 a year for family coverage.
HDHP must also have caps on out of pocket expenditures, cannot exceed $5600 for an individual and $11,200 for a family.
Tax subsidies for contributions up to $2900 for individual coverage and $5800 for family coverage.
Penalty if not spent for qualified medical expenses.
Can withdraw funds at 65

6. HSAs have caught on 6.1 million Americans covered
1.5 million individual policies, 4.6 million group members
7% of employers offer
3% of employees enrolled

7. Successes
46% over 40
Significantly more likely to engage in preventive programs
More likely to track health care expenses

8. But reasons to be concerned
Disproportionately attracts wealthy, healthy, young, well educated
Coverage often limited
Many Americans can’t afford high cost-sharing
Many enrollees limit necessary care
Many end up in financial distress

9. Patients as consumers
Should patients be primarily responsible for controlling health care costs?
Rand Health Insurance Experiment found that high cost sharing caused decrease in expenditures, but for essential as well as inessential care
Sick patients are not well-positioned to make purchasing decisions
Cost and quality data are largely lacking
Consumers may not be the best care coordinators

10. Changes in the physician patient relationship
Informed consent?
Liability where patient chooses not to purchase care?
Liability of insurers for erroneous quality advice?
Liability of insurers to providers for erroneous quality advice?

11. Is there a place for CDHC?
Yes, empowering consumers is fine
But markets only work for those that have money
Purchasing necessary health care should not result in financial disaster
We need universal coverage first, then we can try to make those who have resources better consumers