In honor of early adopters

I’d like to use this note to recognize and thank the early adopters of health savings accounts who signed up with Sterling back when I started the company in 2004.  Those early days were marked with skepticism (not unusual with new initiatives) and confusion about how HSAs would work.  I remember countless meetings with health insurance brokers and consultants to explain why I thought HSAs would be helpful to their employer clients and their employees.  I feel just as strongly about HSAs now as I did then.

Background

Pre-2004, I led national health insurance companies, and the ongoing preoccupation then was how to deliver quality health care affordably.  Most of my career was focused on understanding and curbing physician and hospital cost.  To my regret, I don’t recall a single day in which I thought about engaging consumers, the ultimate users of health services, in helping to manage cost.

Journey begins

The health savings account legislation was part of a federal bill that passed in late 2003 and became effective in 2004.  I saw it as a powerful tool to engage consumers: HSAs provide a financial incentive to consumers to become cost-conscious and in so doing, help bend the cost curve.  I felt so strongly about it that I started Sterling Health Services Administration to administer health savings accounts – no small feat for a woman in her 50’s who had never started a company before!  

The early employer adopters, especially those who self-fund their medical benefit, saw within 24 months an interesting pattern:  Their employees made decisions that made sense for themselves and their families and in the process, saved money.  For example, self-funded employers saw a drop in emergency care use for services, such as migraines.  They saw a reduction in drug costs as employees shifted from brand name drugs to therapeutically equivalent generics.

Not everything was rosy, however.  Lack of education about HSAs failed to convince employees to switch.  As importantly, employers who chose to not fund a portion of the medical deductibles via deposits to the employees’ HSA accounts saw poor enrollment results.  

Conclusion

Fast forward to today and I am sad that health care cost continues to increase at a fast pace.  There’s handwringing about its increasing share of the GDP (likely to go up as an aging population accelerates medical service utilization.)   There are a number of solutions that as a nation we are being asked to consider.  I believe that health savings accounts should be a big part of the solution that calls on each of us to be thoughtful about the use of non-urgent medical services.