St. Paul, Minn. — When Marcus Young, 35, left his full-time management job to become a self-employed performance artist, he discovered a new kind of health insurance. He decided to open a health savings account at a time when most Americans had not even heard of them. "This new product had just come onto the market, the health savings account, and people were saying, 'Oh this is a really good answer to your lifestyle as an independent artist.' So, it sounded good," Young says.
That was two years ago when health savings accounts became law. HSAs combine medical savings accounts with high-deductible catastrophic health insurance policies.
HSA premiums cost a lot less than conventional health insurance. They're cheaper because the plans only cover major medical expenses. If you're using an HSA, you pay out-of-pocket for the majority of your day-to-day health care.
Markus Young pays a monthly premium of a little more than $100 for his catastrophic coverage. That's about a third the cost of the conventional insurance he left behind when he quit his full-time job. Young's policy requires that he spend $1,800 before his major medical coverage kicks in.
Without the low-premium HSA option, Young says he might not have been able to afford any health insurance. He's glad he's got the catastrophic coverage so that if something serious goes wrong he doesn't have to pay the bill.
But when it comes to shopping around for basic care, like treatment for the flu or a sore back, Young says it's been a challenge to get information.
"I don't know why health care is so mysterious. I think of the other basic necessities of life like food, education and shelter and there are not as hard to understand as healthcare. So I go to the grocery store, I know what I have in my pocket. I can buy something. I have food. It's not that hard to rent a place. But for some reason health care is complicated and daunting and some days you just don't want to deal with it and so you just sit at home and you hope you don't get sick, but that's not health care," Young says.
For Young, moving from co-payments to total payments has been complicated. He's avoided going to the doctor. He says no one told him his BlueCross - BlueShield catastrophic coverage entitles him to deep discounts on out-of-pocket expenses at Blue Cross providers.
Young says even trying to get basic information about the cost of being seen by a doctor has been close to impossible.
"I think the concept is interesting and possibly good, but trying to use it -- practically speaking -- it hasn't been much of a help. Mostly because I can't tell what things cost," according to Young.
And without critical cost information, Young doesn't know how to figure out what clinic or doctor to use.
But HSA supporters are convinced that will change as more Americans are forced to shop around for health care.
There is a growing belief that imposing market-based economics on the nation's health care system is the only way to control escalating costs. Proponents of consumer-driven plans, like HSAs, argue that if individuals not insurance companies are put in charge prices will fall and quality will rise.
A medical clinic in Eagan can provide a glimpse into what a more market-based health care industry might look like. MinuteClinic is based in Minnesota. It's built on convenience, customer service and up-front pricing.
At a clinic, located in a CVS Pharmacy in Eagan, the nurse practitioner is checking nine-year-old Sean Powell. Sean's constantly blowing his nose and has been coughing and sneezing. He may have strep throat.
A placard outside the small office spells out its limited treatment price list. It's as easy to understand as a fast food menu. Treatment here for bronchitis, pink eye or an ear infection costs $44. They'll remove a wart for $59. Sean's strep check, including a throat culture, will cost $62.
Sean's mother, Diane, was at the clinic the night before getting a flu shot for her daughter. She likes not having to make an appointment and getting in and out quickly.
"Well I think it's just great. I mean, I was just thrilled and I said OK well let's just run up there and check it out and make sure it's not strep Throat. Because I have to pick-up my daughter after school and it's just a very quick, easy thing. Everybody has been very nice to me here," she says.
MinuteClinic has been rapidly expanding since it began opening locations a little more than five years ago. By the end of this year, company CEO Michael Howe says there will be more than 300 clinics.
Howe says where there are MinuteClinics, conventional providers have responded to the competition by extending their office hours and, in some cases, posting their prices. Howe thinks it's just the beginning.
"You will see primary providers making pricing more transparent. It'll be driven by consumer demand to know what is it that I'm going to have to expend at this point to be able to get the services. And I think there will be more comparisons. I think people will start comparing well if I go to this clinic it will be $150. If I go to this clinic it's $100. If I go to this one it's $80," Howe says.
Consumer-driven health care is the blanket term for a number of efforts to reduce the cost of care, while improving the health of Americans. Proponents say they have a simple solution for a complex problem: if individuals, rather than insurance companies, made decisions, they'd take better care of themselves. They would also demand more value from the medical industry.
President Bush made the case for HSAs during a campaign swing through Minnesota in the fall of 2004.
"I believe this product is going to help change medicine for the better because it keeps the doctor and the patient in charge of health care decisions," he said.
The American Medical Association agrees and says its nearly one million doctors are solidly behind the HSA movement. Among them is Mayo Clinic physician and educator Stephen Hodgson. He's convinced market-driven health care is critical in controlling costs.
Imagine patients transformed into customers, writes Hodgson and a colleague. He reads from their trade journal article.
"A 30-year-old working soccer mom comes into your offices asking for your services."
Hodgson predicts this customer of the future will have researched his credentials on the Internet. She'll know exactly how much he charges and that he'll probably give her a discount if she pays immediately in cash. In addition, she'll expect an unheard of level of customer service, running the gamut from expanded office hours to special treatment at the door.
"She also inquires if you have valet parking and if your office can watch the kids while she's being seen in your examining room. What's going on here? Well medical care is re-entering the great American marketplace and this will change everything," says Hodgson, who is optimistic that when managed care and third-party insurers are taken out of the loop, the doctor-patient relationship will become healthy again.
"I see a lot of holes in the theory," counters Dr. Robert Berenson, senior fellow at Urban Institute in Washington DC.
"My greatest concern is that we are asking patients to not trust their doctors, to think that they can substitute their own judgment for what their trusted physician is recommending to them," he says.
Berenson sees what he calls the hype of consumer-driven health care as a distraction from the real problem. He says the crux of the health care crisis is the cost of treating the chronically ill, not removing warts and doing tests for streph throat.
He also fears market-based health care, when doctors and clinics compete for business, could put profits ahead of the quality of care.
"Ultimately I think what this could lead to, is converting doctors and hospitals from organizations and professionals who have professional ethics to act in the best interest of their patients to just another seller of services who only follows commercial ethics," he says.
Berenson points to aggressive pharmaceutical marketing as an example. Advertising aimed directly at consumers, designed to tell them what drugs to ask their doctors for. In some cases these campaigns have arguably put profits before the quality of care.
Thousands of lawsuits followed ads for Vioxx, claiming its manufacturer -- Merck -- under-represented safety concerns. The Food and Drug Administration accused the company of minimizing potentially serious cardio vascular side effects identified in Merck's own research. Vioxx was pulled from the market.
At least for the time being, health-care providers engage in almost no direct-to-consumer marketing that details price and quality information. Instead their ads stress broad health and lifestyle choices.
At this early stage in the rollout of Health Savings Accounts, HSA users have been navigating the health care system with very little information, whether it's accurate or not. Price comparisons are difficult enough in the health care world, trying to provide consumers with information about quality is even tougher.
Just as HSA promoters say the accounts will force price transparency, they contend providers will begin competing for customers based on quality.
Dr. Gordon Mosser, the president of the Institute for Clinical Systems Improvement, believes one of the best ways to improve quality is through detailed public reporting on the performance of clinics and hospitals. Mosser says measuring quality using objective standards is possible, but it's more complicated than coming up with price comparisons.
Still Mosser says, separate and distinct from the HSA movement, qualitative information has begun to emerge. Mosser points to relatively new data on a Web site published by Minnesota Community Measurement. The organization is funded by Minnesota's major HMOs.
Last fall, for the first time, Minnesota Community Measurement began listing comparative quality information for most primary care providers in Minnesota.
"Anyone now can go to mnhealthcare.org and look up whatever medical group they're interested in. Most of the medical groups in the state are represented on that website and see how the medical groups perform with respect to care for preventive services, or diabetes or asthma or several other conditions. So this is a big advance," according to Moser.
Still, Mosser says quality measurement efforts in Minnesota and a handful of other states have a long way to go before they'll be able to offer the kind of information consumers really need. For now, the information is all provider specific. A consumer cannot use the Web site to pinpoint the quality of care at a particular clinic location. Also missing is information about how hospitals measure up against each other.
"At present somebody seeking to make choices in a Consumer Reports pattern; check the quality data, check the price, would be very frustrated. There's very, very little information available," Moser says.
But even if there were abundant sources of medical information, studies show, nearly half of the adults in America have difficulty understanding and using health information.
Dr. Stephen Hodgson, from the Mayo Clinic, says when patients are engaged in their health care, it generally makes for a better outcome, even if they have bad information initially.
Hodgson looks forward to market-based health care, but warns: weaning Americans from managed-care will be monumental task.
"And it's our own fault," he says. "We've made them totally dependent on other people's decision making and in the process we've really created an intellectual cripples as far as American medicine is concerned. They do not understand this. They have been told that we will make the decisions for them."
Hodgson predicts educating consumers about how to shop for health care and getting doctors like himself to provide information on price and quality will take years, probably a decade.
And while HSAs are at the forefront now, Hodgson says no one can predict how market-based, consumer-driven health care will evolve to change the nation's medical industry.