We see similar reductions in current consumer directed health groups and in the Cash & Counseling type experiments that have been done in Medicaid. The Medicaid results are for those who are chronically ill.

By current health care policy standards these are substantial reductions.

I am familiar with the RAND study. My interpretation is that it did modestly reduce costs for those who were healthy. We have no idea what would happen with large scale implementation, including those who are actually sick. For years I have hoped that a pro-free market state, someplace like Texas, would make this experiment on a state wide basis.

Steve

Large scale study designed to avoid selection bias: RAND Health Insurance Experiment.

On patients not behaving like rational actors–what fraction of the patients you see are actually insured under qualified high deductible plans and have HSAs?

Many of us do, however we also work with patients. Many if not most patients do not behave like rational actors when it comes to making the biggest decisions. After about the hundredth time of offering a safer and cheaper alternative only to have it rejected for a riskier option, you catch on. You also begin to understand how emotionally vulnerable people are when it comes time to make these decisions.

When you first think about things like HSAs, they seem to make sense. Then, you learn some economic theory, couple it with how medical spending actually occurs, who spends it and on what, and you begin to have second thoughts. Before making a widespread commitment, it should have some large scale studies designed to avoid selection bias.

Steve