Part One: New study attacks idea of Medical Savings Accounts

Following the report of Alberta’s Mazankowski Committee on health care, medical savings accounts (MSAs) have become a hot topic. A new study from the University of Manitoba about MSAs has launched a national debate about this idea for reforming Canadian health care. AIMS has been a major contributor to this new debate.

The study claimed to show that MSAs would not result in any cost savings for government but would instead increase health spending by governments. Central to the argument was an MSA model built on the assumption that governments would deposit equal amounts of money in each person’s MSA every year. Applying this specific model of MSAs to data collected on individual usage of Medicare in Manitoba led the authors to conclude that MSAs would not work.


Part Two: Why medical savings accounts make sense: AIMS in the Globe

As a member of the Mazankowski Committee that recommended that MSAs be given serious consideration for Alberta’s health care reforms, AIMS President Brian Lee Crowley was asked by The Globe to respond to the Manitoba study. Crowley, together with AIMS Intern Brett J. Skinner, wrote:

“With MSAs, users of the system become accountable partners in health care decision making. If they spend the money in their account wisely, they get to save the balance at the end of the year. If they think about going to the doctor for the everyday complaints we all face, they have to face the fact that medical services cost money, something our system pretends isn’t so. And if they fall really sick, they get exactly the same level of tax-provided care they’re entitled to today. In other words, people are rewarded for using health care services sensibly, rather than penalized for using them appropriately.”


Part Three: MSA Opponents React to AIMS’ Criticisms

In this piece from the Globe, the authors of the Manitoba study on MSAs respond to criticisms raised by AIMS President Brian Lee Crowley and AIMS Summer Intern Brett J. Skinner. The authors reiterate the findings of their original study and emphasize their argument that no matter how MSAs, are designed they will not work. They argue that:

“If people are not spending much money for medical care in the first place, one cannot expect “incentives” to economize on their use of care to generate meaningful savings…Our results hold for all age groups, and hold whether you are considering all publicly funded health expenditures or physician services only. Given the extreme skewing of the distribution of health expenditures, our results suggest that, no matter how you formulate MSAs, these accounts are not cost saving, unless coverage is cut to the extent that they no longer constitute insurance.”


Part Four: Solomon supports AIMS’ view on MSAs in the Post

Lawrence Solomon, an influential voice in the national debate on health reform, responded to the attacks on the Crowley/Skinner article. Solomon argued that the Manitoba academics “created a system of medical savings accounts so stupid in design that it would be guaranteed to fail.” Referring to an actuarial study of MSAs for Canada done by “Milliman & Robertson, one of the world’s premier actuarial firms”, which showed that the approach would indeed work- and work impressively, Solomon went on to detail just one example of what a real MSA plan would look like.

All Canadians — young or old, sick or healthy – would receive a tailor-made health-care allowance from the government that would be more than they’d ordinarily need to meet their routine health needs, and they would also have unlimited, free care for major illnesses, such as those requiring hospitalization. The poor would pay nothing, ever, even though they, too, would realize savings in three out of four years. In fact, the poor would save more than the rich under the Milliman plan, because they suffer from many more health problems, and would as a result receive much larger health-care allowances.


Part Five: One expert questions whether international experience of MSAs has been positive

A recent article by Samuel E.D. Shortt in the Canadian Medical Association Journal criticizes the MSA concept and takes issue with the empirical evidence for MSA programs in other countries and their success integrating with publicly funded health care systems. Shortt concluded that:

“A review of the scant literature on the experience in the public systems of Singapore and China, where such plans have been implemented, and on a simulation using United States Medicare data, suggests that the approach alone has not controlled costs and may increase inequalities in publicly funded systems. The conclusion is that current knowledge of MSAs is too limited to recommend their incorporation into the Canadian health care system.”


Part Six: David Gratzer sets record straight on MSA experience

AIMS author Dr. David Gratzer, (author of Code Blue and editor of Better Medicine) challenged Shortt’s account of the record of MSAs in other countries. Gratzer, publishing in a recent issue of the Canadian Medical Association Journal wrote:

“Today, Singapore boasts more diagnostic machinery for its population than Canada (waiting times for MRI scans in the city-state are a couple of days versus months here). Singapore has a lower infant mortality and a longer life expectancy than we do. Waiting times for surgery are minimal. Singapore, incidentally, spends less than 4% of its gross domestic product (GDP) on health care; we spend 3 times that. China’s experiment with MSAs has dramatically lowered health care expenditures. The cost savings from the original pilot project amounted to 24.6%; this is particularly impressive given that in neighbouring cities, where citizens still enjoy “free” health care, spending grew by 35%–40%. The initiative is expanding to include Shanghai, Beijing and more than 40 other cities, accounting for some 70% of China’s urban population. In South Africa, MSAs are the most popular type of private health insurance, covering 4.6 million people.”


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