Health Savings Account Blog

It took Ryan more than three years to get an answer from the Government Accountability Office (GAO) on why southeastern Wisconsin pays more for health care than comparable regions and markets elsewhere. Getting comparative health care data “should take three minutes or a visit to the HR manager,” he remarked.

The GAO’s Aug. 15, 2005, report as well as proprietary studies conducted by employers convinced Ryan that health care costs vary greatly among health care institutions in the same region. For example, a common bypass procedure at one hospital in Milwaukee costs $47,000, but $120,000 at another hospital within eight miles. The more expensive one had the best marketing and billboards, Ryan said, but the studies indicated that the best quality care was available from a hospital that charged $65,000 for the procedure.

Ryan wants health care institutions voluntarily to provide more transparent health care costs so consumers will be able to make more informed decisions based on “apples to apples” comparative cost and quality data. His stance is in line with the Bush administration’s health care policy, which, as the administration notes in a web site overview, seeks a “transparency revolution” in health care costs.

As of this year, the administration is requiring transparency from insurance plans participating in federal programs. The Federal Employees Benefits Program and the military’s Tricare system are asking contractors to provide price and quality information. The president also is asking health care institutions and insurers to step forward and make information on prices and quality available to all patients.

Ryan hopes the health care industry will respond and start reporting comparative health care costs and quality data, but he said that if it does not step up to the plate, the government will do it for them. As he put it, “there is a divorce between costs and quality in health care and consumers that has to end.”

Advanced refundable tax credit

Transparency alone won’t solve the health care crisis, Ryan acknowledged. He already has co-sponsored the Health Coverage for the Uninsured Act (H.R. 1872), which proposes an advanced refundable tax credit to help the more than 45 million Americans without health insurance obtain health care. Under President Bush’s health care proposal, low-income families would be able to receive up to $3,000 in a refundable tax credit to purchase HSA-qualified insurance.

Bush has floated this proposal in previous years, and been criticized for not adequately budgeting for the proposed credit. When asked how the credit would be funded, Ryan responded that he is calling for $150 billion over 10 years. He didn’t elaborate on which budget offsets he favored, saying instead that Congress would need to “think out of the box” to create “enough fiscal space to account” for it.

“We are at a proverbial fork in the road” with health care, he commented, describing the current system as “imploding.” In Ryan’s view, the country has a choice with health care between socialism or consumerism, which he described as consumers “voting with their feet.”

‘Tax shelters for the wealthy and healthy’

Although Ryan is convinced consumerism is the best model, he acknowledged that consumer-directed health care has had its critics from its infancy.

When HSAs surfaced in the Medicare legislation, Rep. Pete Stark, D-Calif., issued a statement predicting that they would “destroy health care for the employed who get their health insurance from employers.” Stark said HSAs would turn out to be “tax shelters for the wealthy and the healthy,” and predicted that they would advance an “objective of undercutting employer-provided health coverage.”

Not so, according to Ryan, who thinks HSAs are an essential part of health care in the future. Already, as of January of this year, 3 million people are insured through HSAs and 42 percent of HSAs were purchased by those who previously were uninsured. In addition, Ryan said that 45 percent of those purchasing HSAs earn $50,000 a year or less and 50 percent are at least 40 years old.

But transparency is key to put health care in the hands of consumers rather than health maintenance organizations or the government, he emphasized. That is why, as a long-shot candidate to chair the House Budget Committee next year if Republicans retain control of the House, Ryan is trying to move the discussion about transparent health care costs “front and center.”

At HSA for America, we applaud the work of Rep. Ryan.