Medical Savings Account: Implications for consumer choice, individual responsibility and efficiency

Context: The idea of Medical Savings Account (MSA) was conceived with the objectives to reduce moral hazard, decrease cost of health care, enhance individual responsibility and improve efficiency. However, it is important to note that no implementation of an MSA healthcare policy framework has been perfect. Aims: This paper looks at the broader context of current health policies in different countries and analyzes the reasons why MSAs were incorporated into action and the effects of these implementations. Methods and Material: Secondary literature review was done to analyse the theoretical and empirical evidence with respect to MSAs. Results: Conceptually, MSAs can help eliminate the unnecessary overuse of healthcare by placing more of the financial burden onto the consumer, whereby encouraging individual responsibility. However, for true choice to be provided there needs to be an excess capacity in the system and, in addition, a workforce that is responsive to the diversity of patient’s wishes. From an economic perspective, the notion that MSA has an instrumental value in achieving an optimum allocation of resources is based on the standard economic theory of markets with its assumptions which do not always hold true in the real world. Hence, efficiency may be compromised by giving ‘voice’ to choice. Conclusions: There are drawbacks with all financing systems of healthcare, and MSAs are no exception. Future researchers should consider conducting further studies to see if quality and access to necessary healthcare has improved within an MSA system and if adding supply-side regulations in conjunction with an MSA system produces better results than each would individually.