Consumerism Essential to Prevent Further Cost Explosion

The authors Dean Halverson and Wayne Glowac just self-published their “The Wave of Consumerism that will Change U.S. Business,” and thankfully the Manitowac Herald Times wrote a very well done article about the thesis of their book: as employers have adopted HSAs, employees have begun “asking more questions and asking for price information,” which “hasn’t really happened before with the third party payer system as we know it.”The authors go on to say “when you have someone using a service and not paying for it, it will get abused. If your employer bought your groceries, how often would you have macaroni and cheese, instead of steak and shrimp?”

Furthermore, they say, employers bear great responsibility for the rising costs by “misusing services and failing to take care of their own overall health.” The authors cite some data showing that up to seventy percent of health costs can be tied to unhealthy lifestyles. Glowac believes it will take a generation for consumerism to take hold. With HSA qualified plans, “people are, hopefully motivated to adopt healthier lifestyles.”

Ultimately, however, cost increases will drive consumerism the authors say. They point to some estimates show that “by 2020 the cost of health care could exceed our personal income.”

There are two good articles about this start-up company,, one from Minnesota Public Radio and the other from the Minneapolis-St. Paul Star Tribune.

“ wants to do for health care what Travelocity did for airline tickets,” said the Star-Tribune.

Ultimately, “its success depends on whether hospitals and clinics embrace the radical notion of bundling and pricing care with consumers in mind, not insurers, and make it easy to compare.”

By creating price competition in the health care market place — the first step being to tell people what those prices are — the price will go down.

And a special award goes to Chen May Tee for the best and most accurate and shortest description of an HSA. She writes: “The Bush administration wants to moderate costs with health savings accounts, where consumers stash tax-deferred funds for medical expenses. These are paired with high-deductible, low-premium plans. The hope is that patients will take the money saved on premiums, park it in those accounts and make wise spending decisions on the first $2,000 or $5,000.”

Survey says: Number 1 Reason for Banks to Offer HSAs: Customers Ask for Them

A survey of almost 1,200 financial institutions by Wolters Kluwer Financial has found some interesting and useful market information about HSAs, specifically, the top reasons banks and others are selling HSAs:

  • Customer demand is the number one reason banks and others offer Health Savings Accounts;
  • To increase deposits was the second biggest reason;
  • Growing their revenue and cross-selling other services was tied for the third.

The survey targeted mostly credit unions and community banks, and found more than 60% of them offer HSAs. Among those who do not offer HSAs, one third said they plan to do so in the next three months.

The survey found many banks with a small number of accounts, and very few with a large number of HSAs: 69% have fewer than 100 HSAs, 18% have between 101 and 500, and only 7% have more than 500 HSAs.

The survey concludes that the best days for HSAs are ahead, because the product is still in the early stages of adoption.

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