Jason Furman says there’s something to the right’s Health Savings Account theory of health care reform — if you make patients sensitive to the costs of health care, you can save a lot of money with no discernable impact on health outcomes. But, he says, HSAs with their flat, high deductible create a very bad situation for people of modest means. And, indeed, the evidence that such cost sharing need not lead to averse health outcomes wasn’t actually from a study of HSA-type programs. Rather, Furman thinks that patients should need to cover 50 percent of their health care costs up to a fixed proportion of income, in particular he “would require typical families to pay half of their health costs until they reached 7.5 percent of their income; low-income families would not have any cost sharing.” This would encourage the most downscale Americans to consume somewhat more health care at the low end, while providing cost control measures for more prosperous Americans in a manner that still leaves care deemed necessary clealry affordable.
It seems clever to me. Via Brad DeLong, here’s a writeup. The long PDF version is here (PDF) which reveals a lot of ins-and-outs. In the most liberal version of the proposal, what you have is a single-payer insurance program with the insurance program designed with the cost-sharing provisions Furman outlines. Such a program might also offer certain things for free, namely “health treatments whose benefits are proven but currently underutilized, such as preventive care, statins for people with high cholesterol, or beta blockers to manage cardiac arrhythmiasover.” There are, however, a wide range of other kinds of scenarios consistent with Furman’s main point which, somewhat oddly, ends up leaving him agnostic about the basic questions about the nature of the health care system.
I’ll look forward to seeing the comment of others more learned than I in such matters.