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October 12, 2005
Health Savings Accounts promote price transparency and consumerism
As I talk about often on this blog, one of the biggest impacts Health Savings Accounts (HSA) will have on the healthcare market is the promotion of price transparency and consumerism. There are other trends that are paralleling this movement, in which price and quality information is being supplied to consumers, as people come to realize the previous system of “managed care” does not work. A cursory understanding of economics and history shows that planned and managed economics always loses to the free market when it comes to price and quality.
The Partnership for Change is a union of about 20 employers and unions that have joined with the California Public Employees Retirement System to push for greater quality and price transparency in hospitals in the state of California. This group plans to give higher payments to hospitals that show higher quality and better efficiency.
There is nothing so revolutionary about this, as most companies that provide higher quality goods or services get paid more. The hospital business, though, tends to work very differently. Getting the price of a given procedure is very difficult, and consumers haven’t traditionally had much information upon which to make a decision.
The system in which hospitals have been able to deliver services without having to justify their costs is slowly coming to an end.
Find more Health Savings Account inforamation at HSA for America
Posted by Wiley Long at October 12, 2005 05:36 PM