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The Real Don Berwick

The Real Don Berwick

Consider this –

…[F]or many patients the most basic elements of care were neglected. Calls for help to use the bathroom were ignored and patients were left lying in soiled sheeting and sitting on commodes for hours, often feeling ashamed and afraid. Patients were left unwashed, at times for up to ...

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Back to School: Student Indoctrination Begins

Back to School: Student Indoctrination Begins

The new college academic year has begun, and unfortunately, so has student indoctrination. Let’s look at some of it.

William Penn, Michigan State University professor of creative writing, greeted his first day of class with an anti-Republican rant. Campus Reform, a project of the Arlington, ...

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The Coming Revolution in Consumer Driven Care

The Coming Revolution in Consumer Driven Care

From time to time I like to check in with Bill Boyles to find out what is happening in the market.

As you know, Bill is the publisher of the Consumer Driven Market Report (for subscription information, e-mail This email address is being protected from spambots. You need JavaScript enabled to view it.">This email address is being protected from spambots. You need JavaScript enabled to view it..) He has been writing health care newsletters since dinosaurs walked the earth. He’s seen a lot of things come and go and has earned his skepticism the hard way. So when he identifies a revolution I take him seriously.

I called him this time because I was on my way to Pittsburgh to keynote the annual conference of the Pittsburgh Business Group on Health. I’ve had a pretty good idea of the direction the market is taking for quite a while, but Bill was able to provide some sharper focus. Here is what I took away from our discussion −

  1. Employees are extremely skeptical of and even hostile to the “legacy” players in health benefits including both government and insurers.

  2. Employers are flocking into defined contribution approaches to benefits, in which they make a fixed contribution and their employees decide how best to spend the resources.

  3. As part of that, employers are offering three different account options — Flexible Spending Accounts (FSAs), Health Reimbursement Accounts (HRAs), and Health Savings Accounts (HSAs).

  4. There is a new industry of “CDHC account administration firms” to manage these accounts and provide support services. [CDHC=Consumer Driven Health Care.] Bill recently completed a survey of these companies.

The survey was of the 10 largest CDHC administrators: WageWorks, HealthEquity, Evolution1, Alegeus Tech, SelectAccount, Aetna PayFlex, ConnectYourCare, United UMR, Bloom Health, and Acclaris. It found that these firms reported a total of 24 million CDHC accounts as of January 2013.

The largest firm had 9.1 million accounts, while the smallest had 330,000.

Bill says these CDHC firms are taking over private insurance. They added 4.9 million accounts in a 12-month period and grew from 11% to 15% market share in one year. The number of accounts increased by 25.7% from January 2012 to January 2013, and is projected to reach 42 million accounts by 2016.

All three types of accounts are growing fast. The number of HSAs grew 34.3% in one year, HRAs by 30%, and FSAs by 18.3%. FSA, remain the most common type of account at 42% of the total, but the others are rapidly catching up.

These firms offer integrated platforms for the three accounts and support consumers with website management, debit and credit cards, and increasing cost and quality information. The last is helped considerably by CMS’s decision to open up its data files to all users.

Notice several things here:

These approaches are protected under the Affordable Care Act. Provided the account is funded by the employer, it does not count against the out-of-pocket limits of the ACA.

Insurance companies are relatively minor players. The core benefits are the accounts, and the insurance may end up wrapping around the account, rather than having the account supplement the insurance.

This means vast amounts of money being controlled directly by the health care consumer. We can’t yet know what impacts this will have on health care delivery, but some of it is already obvious –

  • Concierge medicine.
  • Cash-only physicians.
  • Medical tourism, domestic and foreign.
  • Physician-owned specialty hospitals.
  • Retail clinics.
  • At-home and smart phone lab testing.
  • Brokerage firms to match up patients and providers.
  • Telemedicine.
  • New responsibilities for service providers to manage debts and receivables.
  • Chronic disease services that are more like social work than medicine.

Throw in a growing demand for published prices, and we are off to the races in the greatest transformation of the health care system we have ever see



Greg Scandlen is the founder of Consumers for Health Care Choices, a non-partisan, non-profit membership organization aimed at empowering consumers in the health care system. A former NCPA staff member, Scandlen is an accomplished writer, researcher, and public speaker. He is considered one of the nation's experts on health care financing, insurance regulation and employee benefits. He testifies frequently before Congress, and appears on such television shows as the O'Reilly Factor, NBC Nightly News, and CNN.

Scandlen has published numerous papers on topics such as health care costs, insurance reform, employee benefits, individual insurance programs, HSAs and HRAs, and every aspect of consumer-driven health care.

He also has served as a fellow in health policy at the Cato Institute and as President of the Health Benefits Group, a consulting firm in Frederick, Maryland.


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NEA Continues It's Anti-Parent Bias

NEA Continues It's Anti-Parent Bias

The National Education Association, the NEA, is certainly one of the most powerful lobbying groups in the United States. The NEA holds a large convention every Fourth of July weekend and reaffirms its support of a long list of leftwing policies. When you hear the liberals and the feminists say the ...

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A Real Vote to Defund Obamacare

A Real Vote to Defund Obamacare

One of the disillusioning facts about Washington is that Congress can vote on something and that vote won’t mean a thing.

It would seem that a congressional vote should be a meaningful occasion, with Members weighing the costs and benefits of voting for the particular measure at hand. ...

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America, You’ve Been Punked

America, You’ve Been Punked

The Reading Wars were always chaotic and confusing. Here’s the gist:

On the one side, you had earnest, sincere people warning the country about the dangers of non-phonetic approaches (these were called Look-say, Whole Word, sight-words, and other jargon). The warning was always the same. Nobody can ...

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CDC Funds Faulty Anti-Alcohol Study That Targets Budweiser

CDC Funds Faulty Anti-Alcohol Study That Targets Budweiser

Media misinterpret Hopkins analysis of tiny number of emergency patients.

If you end up in the emergency room for a serious injury after a night out, it might be because you were drinking Budweiser.

Or at least that’s the claim of a questionable new study, conducted by The Center on Alcohol Marketing ...

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The Dawning Database: Does the Common Core Lead to National Data Collection?

The Dawning Database: Does the Common Core Lead to National Data Collection?

The U.S. Department of Education is prohibited by law from creating a national data system.1 But the Education Science Reform Act of 2002 gave the federal government the authority to publish guidelines for states developing state longitudinal data systems (SLDS).2Over the past decade, a slew of new ...

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Medisave Accounts in Singapore

In 1984, Richard Rahn and I wrote an editorial in The Wall Street Journalin which we proposed a savings account for health care. We called it a Medical IRA. That same year, Singapore instituted a related idea: a system of compulsory Medisave accounts. Through the years, my colleagues and I at the ...

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