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Medical savings accounts: opportunities for cost savings?
Author(s) -
Zaric Gregory S.,
Hoch Jeffrey S.
Publication year - 2006
Publication title -
international transactions in operational research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.032
H-Index - 52
eISSN - 1475-3995
pISSN - 0969-6016
DOI - 10.1111/j.1475-3995.2006.00560.x
Subject(s) - health care , business , actuarial science , public healthcare , healthcare system , health insurance , public economics , economics , economic growth
Interest in medical savings accounts (MSAs) as a potential tool to reduce healthcare costs has been widespread. A small number of countries have either implemented or run pilot programs of MSAs, and vigorous policy debates have taken place in several other countries about the potential merits of introducing MSAs as a method of paying for health care. In this paper we develop a model to assess the cost saving potential of MSAs in a publicly funded healthcare system. We assume that the public healthcare payer may choose between reimbursing healthcare expenditures through an MSA or through a form of third‐party payer insurance. We use the model to identify the conditions under which MSAs may reduce costs. We illustrate using data on healthcare expenditures from Canada.