Better health information needed

April 23, 2006|By JANET KIDD STEWART | JANET KIDD STEWART,TRIBUNE MEDIA SERVICES

Business owner John Wagner is thinking hard about establishing health savings accounts for himself and the roughly 50 workers for whom he provides medical insurance.

The accounts, created in 2003 by the Bush administration, allow employees or individuals to save money in tax-advantaged investment vehicles for routine health needs not covered by accompanying high-deductible insurance plans. Contributions to HSAs are tax deductible, and withdrawals are tax free if used for qualified medical expenses. Unspent money can accumulate over the years.

Wagner has been paying 100 percent of his workers' premiums, but with costs continuing to mount, he's worried he won't be able to continue.

He hopes that as so-called consumer-driven health care takes hold, Americans will become smarter users, lowering overall costs and taking the administrative hassles away from businesses like his.

Americans have stashed more than $1 billion into HSAs since their launch, and several hundred banks and financial institutions now offer the plans, either directly to consumers or through employers, according to newsletter Inside Consumer-Directed Care.

You can find information about account providers at Web sites that include www.hsainsider.com and www.hsafinder.com. Help with buying health insurance on your own can be found at www.ehealthinsurance.com.

This month an alliance of health provider United Healthcare, benefits consultant Hewitt Associates and the makers of Quicken software, among others, announced they will launch a software product next year that will help consumers manage health costs in an increasingly complex market.

With millions of patients now juggling flexible spending accounts, HSAs or complex prescription reimbursement plans, many are overwhelmed, said Mindy Kairey, a practice leader with Hewitt Associates.

Of course they are - not only with paperwork but also with a confusing matrix of information about providers and insurers.

"Consumers don't have enough good information to make choices, either on quality or cost," said Jim Guest, president of the Consumers Union, an advocacy group. The push for consumer-driven care is coming from political and business circles, not consumers, Guest said.

The group is lobbying for more consumer representation at forums on changing health-spending models, and it is trying to create better information in the market, such as its Web site for comparing prescription drug costs at www.crbestbuydrugs.org.

What consumers really need to take charge of their care is an overhaul of health industry disclosure rules to create transparency, on par with the creation of accounting principles and securities laws in the 1930s, said Regina Herzlinger, a Harvard University health industry expert who also teaches accounting.

Herzlinger advocates universal insurance through subsidies paid directly to poor patients who can then choose their care.

"You can't be a good shopper without excellent information, and right now it's all baloney," she said.

Janet Kidd Stewart writes for Tribune Media Services.

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