Modern Healthcare: At what point did you realize that you had 'fathered' a 'child' that could change the healthcare industry? John Goodman
John Goodman: I first went to Capitol Hill to propose the idea of a savings account similar to an IRA for healthcare in 1990. At that time, only five members of Congress would agree to meet with me.
However, in 1994, the Republican Party was searching for an alternative for 'Hillary care.' Senator Phil Gramm (R-Texas) invited me to Washington and ushered me into a room with about 20 Republican senators. Senator Gramm said, 'This is John Goodman and he has the only new healthcare idea I've seen in over 20 years.' Republicans in the Senate developed an alternative bill, the core of which was a medical savings account. The idea was successful in helping defeat Hillary Clinton's healthcare plan, but it wasn't clear whether the idea would have a life of its own.
Later that year, the GOP took control of the Congress, but (medical savings accounts) MSAs, the precursor to HSAs, were not a part of it. It wasn't until 1996 that a pilot program for MSAs was enacted, thanks to a bipartisan effort led by Representative Bill Archer (R-Texas), then chairman of the House Ways & Means Committee. However, the pilot program was very limited, and insurers did not aggressively sell the product.
It wasn't until the Medicare drug benefit legislation in 2003 that it was apparent that HSAs' time had come. As of January 2004, HSAs became available for all the nonelderly population. Since then, their adoption rate has soared faster than any other financial product, including IRAs.
MH: At what point did you realize that you have become the 'father' of the 'child?' Goodman
Goodman: After the MSA pilot program was under way, the Wall Street Journal gave me that title.
MH: Did your 'child' grow up the way you expected? Goodman
Goodman: The biggest surprise was the complete sea change in the way the idea was viewed by employers and insurers. In the 1990s, all the big players in the employer and insurer communities were opposed to HSAs. But by the end of the decade, all those opponents became supporters. In 1990, no one could have predicted that development.
MH: What factors had a positive or negative influence on how your 'child' grew up? Goodman
Goodman: After a 10-year experiment with managed care, many employers and insurers concluded that either managed care cannot work, or the political system will not allow it to work. Since we cannot use managed care to choose between healthcare and other uses of money, those that were worried about controlling healthcare costs concluded that employees must be allowed to make those choices on their own.
MH: What do you see as your 'child's' future? Goodman
Goodman: HSAs will continue to be popular and will continue to meet the needs of patients. Yet, we are not fully taking advantage of them. The greatest opportunity is with the chronically ill. Healthy people tend to interact with the healthcare system episodically. Once in awhile they go to the emergency room or take a prescription drug. On these occasions, they gain knowledge that improves their skills as medical consumers. But it may be several years before they use that knowledge again, by which time it may be obsolete.
The chronically ill are different. Their treatments are usually repetitive, requiring the same procedures, visits and/or medicines, week after week, year after year. Consequently, cost-saving discoveries by these patients are not one-time events. Rather, they pay off indefinitely. ...
Numerous studies have found the chronically ill can reduce costs and improve quality by managing their own care. But healthcare management is difficult and time-consuming. So patients should reap both health rewards and financial rewards from making better decisions. Insurers should be able to create versatile HSA accounts for patients with differing chronic conditions. They should be able to adjust the accounts' funding to fit specific circumstances.