Making a decent idea a little bit worse

In my own little corner of American medical care, so far I haven’t felt much of a ripple from the Affordable Care Act (or, if you prefer, “Obamacare”).  The changes in insurance regulation that have already gone into effect don’t seem to have had much impact my patient population.  I had some misgivings about the bill (I was very unhappy about the lack of a public option), and I think its sheer mass and opacity made it hard for even attentive Americans to know exactly what we’re getting.  However, I remain hopeful that it will improve medical coverage for people who would otherwise lack it.

Unfortunately, what little ripple I have felt is discouraging.  For people who have opted for coverage using a Health Savings Account (HSA), the ACA has made life perceptibly worse, and for no good reason that I can think of.

HSAs allow people to save a portion of their income for health purposes, and to avoid paying taxes on that portion.  Typically they are combined with enrollment in a high-deductible insurance plan.  I have to admit I don’t fully understand all the regulations that govern HSAs, but for patients who can afford a certain amount of out-of-pocket cost, they strike me as a good idea.  Certainly, patients who use them have a better sense of what their health care costs may be as they are paying them directly up to a point, and I think there’s some merit in that.  Once patients reach their annual maximum, the high-deductible plan covers remaining costs.  It doesn’t seem a bad option for otherwise healthy young people wanting catastrophic coverage.

So, how has the ACA made HSAs noticeably worse?  Used to be you could use them for over-the-counter medications, and now you can’t.  (The 2004 regulations are available as a PDF, with the relevant information about halfway through — “Now includes over-the-counter drugs.”)  Saints have mercy on my soul, I have found a policy for which Obama took a perfectly good Bush-era regulation and made it crappier.  (Doubtless motivated commenters may feel moved to point out others.)

I can think of no good reason that over-the-counter medications cannot be paid for out of an HSA.  The money in the account belongs to the person who saved it.  Over-the-counter medications have no practical non-medical use, outside of creatively rejiggering Sudafed for recreational purposes (and we already have laws for that).  Over-the-counter medications are safe enough to be available without a prescription (and we already have an agency to ensure that).  Why should patients need a prescription from me to spend their own money from an HSA for an over-the-counter medication?

If this is some kind of asinine attempt at lowering healthcare costs, allow me to aver that it is a failure for a host of reasons.  First, people are going to buy the medications they want, the only difference being whether payment is drawn from untaxed income or taxed.  The government won’t reap any benefit from having that portion of the HSA unused.  Perhaps this is a nannyish attempt to keep patients from frittering away their saved pennies on medications they don’t really need, but I happen to think we don’t really require federal oversight on whether people should be allowed to spend their own money on things they think they need, healthcare or otherwise.  HSAs are for healthcare expenses, and medications (over-the-counter or otherwise) are healthcare expenses.  What further scrutiny or explanation is necessary?

What’s more, it’s not as though patients are going to be daunted by the need for a prescription.  No, if my experience is any indication, they’re just going to ask their doctors to write out prescriptions for medications that otherwise wouldn’t require them.  It’s happened to me several times already, often coming as a phone or e-mail request.  If I were a real schmuck about it, I could refuse to provide a prescription absent an office visit, thus adding the price of the visit to the otherwise low cost of the medication.  Since I try to avoid being a schmuck whenever I can help it, I simply provide the prescription.  Between my front desk staffer who fields the call, me writing the prescription and the pharmacist processing the needless order, you get the steady accretion of uncompensated, tedious busywork that is always the hallmark of truly outstanding policy.

In all seriousness, I would truly love to have someone give me a plausible explanation for this change in policy.  Any sane reason the government should keep people from using money they’ve saved for healthcare costs on otherwise easily-accessible medications already determined not to require a prescription is welcome.  The ACA may have touched my practice very lightly, but I can’t say I like what I see so far.

Russell Saunders

Russell Saunders is the ridiculously flimsy pseudonym of a pediatrician in New England. He has a husband, three sons, daughter, cat and dog, though not in that order. He enjoys reading, running and cooking. He can be contacted at blindeddoc using his Gmail account. Twitter types can follow him @russellsaunder1.


  1. It seems to me that the fundamental problem is in the government’s failure to distinguish between “Health Care” and “Health Care Coverage”.

    The former consists of one of two things: 1) physical items. This can be a prescription for something, it can be a hospital room with a bed in it, it can be a scalpel, it can be thread.
    2) The time of a physician/nurse/candy striper/janitor.

    “Health Care Coverage” is neither of these things. It is, instead, a promise of these things. It is a man standing behind a podium waving a piece of paper. It is a speech entitled “Health Care In Our Time”. It does not create a pill, it does not provide a prescription, it does not cut an incision, it does not change a bedpan. It merely promises that someone else will do this.

    There are a limited amount of pills, beds, MRI machines, scalpels, but we can always make more of those by promising to pay for them. (Have the government put in an order for 15 MRI machines and soon you will have 15 MRI machines.)

    When it comes to the creation of the time of a physician/nurse/candy striper/janitor, however, there is only one way to get that:

    Hire somebody. And they have to be someone fairly qualified… Janitors are probably the easiest jobs to train, then Candy Stripers, then nurses, then physicians.

    The problem with Congress’s Affordable Care Act is that it does not create more physician/nurse/candy striper/janitors and it does not really do a whole lot to purchase pills, beds, MRI machines, scalpels, or whatever.

    It just promises a lot of people a lot of things.

    It creates expectations. Not Health Care.

    • Well, sort of. If you know you can’t afford the services of a physician, no matter how many of them may happen to be in your area with available appointments, it’s still going to keep you from getting the services you need. The assurance that your care will be paid for will, in part, facilitate your access to services you would otherwise lack.

      There are lots and lots and lots of things wrong with our current system. My conservative streak laments that there may be little anyone can really do about them. The government may offer all manner of glorious incentives for providers to decamp to Aroostook County, Maine from a super-saturated area like Boston or Manhattan, but nothing can force them to actually move (at least not in any country where I would choose to live). I can spend hours of my life explaining why an emergency department is not an appropriate place to go for an earache, but there will always be people who opt to go there rather than wait the ten hours for the office to reopen. Human nature will always confound the best plans to Make Everything Better.

      That said, there are plenty of ways in which the government can play a positive role. Sadly, in the case of this change to HSAs, its policy has made things worse.

      • My fundamental assumption is one of the opening sentences from a Econ 101 lecture: “Price is a function of supply and demand.”

        Given that we are in a situation where the price of Health Care keeps going up, that tells me that we are in a situation where the supply is growing (if it’s growing at all) at a rate smaller than the rate at which demand is growing.

        Since the bill made promises, it increased demand without increasing supply.

        This will make the price go up more… and, if bidding starts, the rich and middle class will be able to outbid the poor.

        So the poor get screwed once again.

        If the government wanted to help, it would have printed money and started offering free Medical School to qualified applicants. We’d get more physicians and nurses and *THAT* would help with downward pressure on price.

        As it stands, the government only increased demand… and, as such, made the problem worse in the guise of making it better.

        • 1) The government could have made things better by offering to cover all or most of the cost of medical school for people willing to work in areas of high need for a set period of time. There are loan repayment programs from working in high-need areas, but there are flaws in the system. (The loan repayment disbursements are taxable income, so you end up having to pay the difference between what’s due on the loan and what you get after taxes out of your own pocket.) We don’t need more doctors, we need more doctors in poor areas.

          We do need more nurses.

          2) There is no monolithic good or service called “healthcare.” There are numerous goods and services of varying degrees of expense that fall under that heading. The demands of the poor (“be able to take myself or my child to the doctor without prohibitive office fees”) differ from unfettered access to whatever test/consultation/medication one wants. The rich will always be able to afford better everything than the poor, and my hopes for health care reform aren’t for everyone to get the exact same care. Rather, that for people who would otherwise defer basic care like preventive or acute sick visits because of the associated fees, there will be essential coverage.

          One of these posts I’m going to write about my experience working in a hospital that catered almost exclusively to the wealthy, with pediatricians who accepted no insurance. Ironically, the care I observed was much, much worse.

          A great many doctors don’t want to see their patients morph into customers. We want to be able to deliver good care to everyone without concern that we won’t get paid for our time. I’m not going to cull patients from my panel by amping up the price just because I can. Maybe some doctors would do this, but I think not so many.

          • One of the big problems, however, is illustrated by an argument I got in a while back.

            In discussing health care, I discussed one of my fixes which was a two-tiered approach. Everybody is covered for X and Y. If you want Z? That costs money. We will always have someone argue that we, as a society, are rich enough that we ought to be able to cover Z for the poor. The person I was arguing with asked “well, why *CAN’T* we provide coverage for Z?”

            So we’re going to have a situation, no matter what, where someone will ask what kind of society we live in where Donald Trump can afford Z but poor children from the wrong side of the tracks cannot. “Do you want the poor children to just lie down and die?” seems to be a question that can be asked unless, of course, Trump can’t get the treatment either.

  2. So we’re going to have a situation, no matter what, where someone will ask what kind of society we live in where Donald Trump can afford Z but poor children from the wrong side of the tracks cannot.

    I am not that guy. (Although must you use Trump as the rich guy in question? Blech. If ever there were someone I would relegate to a hovel somewhere in Borneo…) I accept as an ineluctable fact of life that the rich can afford nicer things than the poor. I am not a socialist, and consider enforced equality of outcomes one of history’s more notable failures.

    I want everyone to have access to competent, compassionate care in a relatively timely manner. I don’t believe everyone should be able to demand a third opinion from the world’s preeminent authority on [X].

  3. Here’s a relevant article from the WSJ:

    “[I]f my experience is any indication, they’re just going to ask their doctors to write out prescriptions for medications that otherwise wouldn’t require them.”

    According to the article, this is exactly what is happening. Many doctors are now charging money for writing out these prescriptions.

    “For people who have opted for coverage using a Health Savings Account (HSA), the ACA has made life perceptibly worse, and for no good reason that I can think of. HSAs allow people to save a portion of their income for health purposes, and to avoid paying taxes on that portion.”

    …and that last is the good reason, according to the bill’s drafters.

    What they’re saying is that since the typical arrangement is that the money in the HSA disappears at year’s end, then it encourages overconsumption and waste; people buying so much Immodium that they wouldn’t poop until 2140, that sort of thing. Potential tax revenue was given up for a purpose that went unfulfilled.

    • I’m scanning back through the article, so these quotes will be out of order.

      Critics say the accounts encourage overconsumption of medical services.

      One could make this same argument about traditional insurance, in that patients only pony up a limited amount for a co-pay, and are otherwise insulated from the actual cost of the doctor’s visit. Patients with an HSA are paying for the care directly with their own money. I consider this argument a wash.

      “It drives up the cost of health care as opposed to reducing it,” says Dr. Chung, who rejected much of a 10-item request from a mother of four that included pain relievers and children’s cold medicine.

      I wouldn’t have written a prescription for the cold medications, since I don’t recommend them anyway. But if I’ve recommended Tylenol or Advil, then it seems churlish to deny a prescription if that will allow people to spend their own money on something that I think will help their symptoms.

      Every time this has come up in my practice, it has been for medications like Claritin or Tylenol. These are the kinds of medications that patients are encouraged to try on their own before seeing a physician, in order to manage symptoms that may not require the cost of a doctor’s visit. Creating a barrier to access for people who have set the money aside for that express purpose is a false economy, and strikes me as government over-reach.

      Since consumers typically must forfeit unused funds by year’s end, they often ended up scrambling in December to drain their funds by loading up on aspirin, antacid and the like.

      So what? It’s their money! The government’s argument seems to be “if we don’t think you’re spending it the way you ought, we should have the right to tax it.” I think people should be allowed to access the funds they set aside, and take the calculated risk that they’ll lose some of it at the end. If they blow it on a pile of Maalox, oh well. Maybe they’ll adjust their savings accordingly the next year, so there isn’t such a surfeit of funds at the end.

      A spokeswoman for the Treasury Department, which oversees tax policy, says the provision “enjoyed bipartisan support in Congress, but, as the president said, anything can be improved, and we are always willing to listen to ideas about how to make health care better and more affordable.”

      Great! Change things back so my patients are allowed to access funds they’ve set aside for health care expenses in order to pay for common and effective remedies to simple ailments.

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