In "How American Health Care Killed My Father" (The Atlantic 9/09), David Goldhill offers his prescription for what ails America’s healthcare system:

"Every American should be required to maintain [a Health Savings Account (HSA)], and contribute a minimum percentage of post-tax income [...] [M]ajor expenses (an appendectomy, sports injury, or birth) that might exceed the current balance of someone’s HSA but are not catastrophic [...] should be funded the same way we pay for most expensive purchases that confer long-term benefits: with credit. Americans should be able to borrow against their future contributions to their HSA to cover major health needs; the government could lend directly, or provide guidelines for private lending. [Government provided] catastrophic coverage should apply with no deductible for young people, but as people age and save, they should pay a steadily increasing deductible from their HSA, unless the HSA has been exhausted. As a result, much end-of-life care would be paid through savings."

So, when a person’s HSA is depleted from bad investments and/or medical expenses, the government’s "catastrophic coverage" covers medical expenses that exceed a threshold (somewhere between $2,000 and $50,000) but with an age-dependent deductable. All other expenses in excess of the HSA balance would be covered by government loans to be repaid from future HSA contributions. To a person with a depleted HSA, assuming that these government loans are forthcoming, this looks very much like Medicare. But, if those loans are not forthcoming, it looks like bankruptcy if and when the costs of non-catastrophic illnesses accumulate beyond ability to pay.

To see who would benefit and how from personally managed accounts such as HSAs (or Bush’s "personal retirement accounts"), see this Dkos diary by devilstower.

According to Goldhill, having the patient pay for his/her own care would create "customer-centered health care": "Imagine my father’s hospital had to present the bill for his "care" not to a government bureaucracy, but to my grieving mother. Do you really believe that the hospital—forced to face the victim of its poor-quality service, forced to collect the bill from the real customer—wouldn’t have figured out how to make its doctors wash their hands?" But, each year, 100,000 Americans are killed by medical errors and a million are forced into bankruptcy by medical bills. How can can anyone think that the widows of the victims of medical errors are not already well represented among those millions whom medical-bill collectors drive into bankruptcy?

The free-marketeers have had America’s healthcare system to themselves for fifteen years, and the mess that killed Goldhill’s father is the result. IMHO, Goldhill’s plan is whimsical, neoliberal theorizing. He offers no existing model anywhere in the world where it is working. On the other hand, there are many examples of systems that involve a much less economic competition and much more government involvement than our status quo that are very effective and efficient, including systems our own Veterans Health Administration (VHA) — see Phillip Longman’s coverage here and here.