Smart Healthcare Consumers Turning to Health Savings Accounts

"Consumer driven healthcare" is the name that has been given to the change that is currently happening in the medical marketplace. As millions of people get Health Savings Accounts, medical providers are having to adapt to the new reality of people spending their own money when purchasing healthcare. As more companies compete for your business, the opportunities to save money will continue to grow.

Since the advent of employer-sponsored health insurance during World War II, the pricing and quality of medical services has been shrouded in mystery. As the real price for computers, organic food, big-screen TV's, and just about everything else has continued to drop (including health services where there is not a third party payer, such as laser eye surgery, contact lenses, over the counter medication), the price of healthcare has continued to rise. But that is finally beginning to change. And you, fellow HSA-owners, are the reason.

To gain a competitive advantage, healthcare providers have traditionally attempted to grow local market share in an attempt to extract higher payments from insurance companies. But since Health Savings Account owners have the ability to accumulate unspent funds and invest them tax-free, those of us with a Health Savings Account have a strong incentive to avoid unnecessary care, and to be more cost conscious when we seek treatment.

There are now billions of dollars in Health Savings Accounts, and healthcare providers want access to that money. And since you control it (instead of the insurance company), the only way for the provider or retailer to get that money is to offer you high quality care at a price you are willing to pay. And dozens of companies are doing just that.

The Market Responds

One obvious response to the consumer-driven healthcare movement is the proliferation of quick-service medical clinics. These clinics, which require no appointment and typically charge less than $50, offer a low-cost way to diagnose and treat strep throat, bronchitis, pink eye, and other common ailments. MinuteClinic operates dozens of locations in Target, Cub Foods, and CVS Pharmacy stores. Wal-mart, which currently has 75 in-store clinics in 12 states, is forecasting more than 6,600 in-store medical clinics will be open in retail stores within 5 years.

Diagnostic labs, which have traditionally sold their services to physician's offices, are now offering tests directly to the public at prices often 70% less than you would pay at a doctor's office. With most you can order the test online, go give blood, and get your results in a couple days.

Companies are even providing self-testing services and devices which can enable you to avoid going to the doctor when minor medical events occur. One of the most common reasons kids see a doctor is because of a possible ear infection. For about $50 you can buy an EarCheck Middle Ear Monitor. This uses sonar to test for fluid behind the eardrum, which may indicate an infection. "The QuickVue Strep Test" which costs less than $4 per test in a pack of 25, can quickly help you determine if your child has a strep infection, which would require a doctor's visit, from a common viral infection, which would not.

Demand Price Transparency

Health Savings Accounts reward personal responsibility in three ways: 1) they reward you with tax-breaks for putting money aside to cover future medical expenses; 2) they reward you for taking care of your health by enabling you to grow your account; and 3) they reward you for being a cost-conscious and discerning consumer.

So be a discerning consumer, and spend your money wisely. Remember that the doctors and healthcare providers you see work for you. If you don't get the quality of service or a fair price, take your business elsewhere. Here are some common sense suggestions to make sure you do get a good price:

1. Ask how much it will cost, before you buy. There is nothing else that you buy without knowing the price up front, so don't feel intimidated to ask your doctor the same.

2. Review your bill before paying it. You might be shocked how often extra charges are "accidentally" tacked on to hospital bills.

3. Ask for a cash discount. To avoid the hassles of filing for insurance and trying to collect past-due charges, most physicians will gladly offer a cash discount if you ask.

4. Explain that you will be paying out of your own pocket. When a doctor is prescribing tests or writing prescriptions, he or she is rarely taking cost into consideration. The American Journal of Preventive Medicine recently reported that up to $63 billion in medically unnecessary tests are ordered every year.

5. Vow never to pay list fees. Doctors and hospitals routinely discount their services to insurance companies and PPO organizations. As a cash-paying customer, you should get the best price available.

For many years, a small group of health economists and other policy-makers pushed for a more market-based approach to healthcare. They correctly argued that healthcare was like any other market and that if you put a true price on health care services and let the market function, costs could be controlled. We are now beginning to see this happen.

Our healthcare system is the best in the world. It is a dynamic and complex work in progress, which can only get better as the consumer gets involved. So be savvy about how you spend your healthcare dollar. And watch those unspent funds in your Health Savings Account continue to grow.

The Medicare Trust Fund will soon be out of money, and there will be no practical way for the government to continue to provide the level of benefits that current Medicare recipients receive. The result will be serious rations, waiting periods, and a reduction in benefits. If you wish to maintain your medical freedom, and have access to a high level of medical service, you must be prepared to pay for it yourself. The best strategy is to take good care of your health, and to build up your medical retirement fund as large as possible by using a Health Savings Account.