A great deal of fantasy has been spun around the benefits of forcing consumers to pay for medical treatments as they fall ill and preventing them from choosing to prepay for all medical care, including doctor consultations for illnesses that are not actual emergencies. Usually the fantasies center around High Deductible Health Plans, plans that require the consumer to pay the first $5,000 of all medical expenditures.

By effectively raising the price of care in this range we should obtain short run savings. People will self-medicate or visit curanderos or grit their teeth. If they get really sick they will hold their noses and see the doctor or be taken to the Emergency Room when they pass out on the street.

So how much of our total medical spending will be addressed by this economic nostrum?

The Henry J Kaiser Family Foundation Report on Health Care Costs publishes a very interesting chart on the distribution of health care spending through the population:
Health spending is distributed unevenly through the population so that most people, over 80% of the population, never meet the $5,000 deductible. The top 20% of health care consumers cost on average $4,029 dollars in 20007 and accounted for 80% of spending. Which would imply that even if high deductible plans were universal and caused consumers to cut back their health care spending by 20%, we would still only see a 4% savings. Only if consumers cut their spending in half could we hope to get to 10% savings.

And of course this calculation ignores the new chronic conditions that will be caused as people spend less on ordinary treatment.

But the real point here is this: If everyone is forced to buy high deductible health insurance policies - say by the Wyden Bennett Healthy Americans Act - health insurers will be able to collect premiums from over 80% of the population while paying benefits to only 20%