People Pay With Time, Not Money, For Health Care The RAND Health
Insurance Experiment shows that: 1. Patients are responsive to
out-of-pocket costs; if people face a high deductible, rather
than first-dollar coverage, they will reduce their health care
spending by about 30%. 2. This reduction in health care spending
has no effect on the patient's health care in most cases. 3.
Patients reduce their spending not by comparing the marginal
value of various medical services with other uses of money;
rather, they reduce their spending by deciding not to initiate
care in the first place. According to John Goodman, the "Father
of Health Savings Accounts": The health care system is a
bureaucratic, institutionalized structure, in which normal
market processes have been systematically suppressed. Since most
people pay with time, not money, when they buy care, providers
are not competing on price or quality. Since price and quality
data are not available, patients find it impossible to trade off
money against health serv