The American Spectator

p> Consumer vs. Catastrophic br> Opponents of CDHC often propagate the myth that because much of health-care costs are catastrophic, and hence expensive, introducing consumerism into health care is doomed to fail. For example, Karen Davis, president of the Commonwealth Fund, recently argued that “the very ill — those suffering from heart attacks, strokes, cancer, mental illness, or injuries — are responsible for most of the nation’s health-care costs… shopping for the best physician or hospital is impractical in such circumstances.” The Center for American Progress chimed in , “HSAs also do nothing to solve the underlying problem of exploding health-care costs. The approach does not address the costs associated with high-cost patients who account for most health-care spending.” /p>

While it’s true that you shouldn’t be looking around for your HSA checkbook if you are having a heart attack (and no one is saying that you should have to), both Davis and the Center for American Progress seem to be making the mistake that many of CDHC opponents do: assuming that health-care expenses that one can pay for out of pocket and catastrophic expenses are mutually exclusive. But they aren’t. Consider that when a patient goes to a hospital for elective surgery, he pays for it out of his HSA. On the bill, he will be charged a price for the anesthetic. Since he can get the surgery at other places, the hospital will have to work to keep the charge for anesthetic low. That will also effect the price that the hospital charges for the anesthetic used in catastrophic care — say, open-heart surgery — if for no other reason than that insurance companies that pay for the catastrophic care will be keeping a close eye on what the hospital charges for the non-catastrophic care. From payments to surgeons, medical supplies, and doctors’ office visits, there are a potentially endless number of areas of health care where CDHC will have a beneficial effect on both consumer-based and catastrophic care.

p> GAO Shows That HSAs Benefit the Wealthy br> According to the Center for Budget and Policy Priorities (CBPP): br>