Thursday, December 30, 2010

HSA and Marketers

Have you ever seen those slick ads telling folks they can get a free scooter from the government?

Slick marketers have learned that when a third party is picking up the tab, people are likely to spend foolishly.

While discussing the differences between the Health Savings Accounts and the Medical Savings and Loan, I should mention that the HSA coupled with high deductible insurance preserves the perverse incentives of third party payments.

Marketers are attentive to who is paying the bill. As such, they market unnecessary medical expenses to people who are getting their care funded by the high deductible insurance.

Patients, of course, are attentive to their deductibles and plan their doctor visits to get as much free care as possible.

The medical savings and loan has all expenses being self funded by the patient ... eliminentating the perverse incentives.

Supplements to the MS&L come in the form of grants. The grant givers are likely to be highly atuned to nature of the spending. They are less likely to give grants to people who spend frivolously.

Marketers would take a different approach to people in the Medical Savings and Loan. The sick will do a better job guarding their money, while the healthy would end up with massive amounts of cash in their Health Savings Account. Businesses would compete developing products that help the sick get the most out of their money and concentrate frivolous marketing on the healthy ... probably in the form of preventative care and savings related products.

A study on how the Medical Savings and Loan differs from Health Savings Account would be a wonderful addition to research related to liberty and health care.

I would be happy to help anyone with such an academic study.

A conference on the Medical Savings and Loan could result in numerous academic papers, publications and even new businesses.

It would cost very little to host and would produce a world of good. All the conference needs is a group of people willing to spend a day or two talking about free market alternatives to group funded health care.

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