THE CASE FOR HSAs:

Even people who take their health very seriously calculate costs and benefits. Time spent at the gym, for example, is time we cannot spend playing with our kids, or making the money we need to pay for our ever-rising health insurance premiums. Submitting to a colonoscopy, while minimally costing time, money, and discomfort, may not provide us with any personal benefit whatsoever--all of which we put into the mix before deciding if this is the day we have the test done.

In short, in our day-to-day lives we regularly apply a kind of informal cost-benefit analysis to the decisions we make about health care. To take another example, say you decide it's worth the effort to lose twenty pounds and firmly resolve to do so. Then your mind will instantly turn to mulling what would be the most cost-effective way to go about it: eat less or exercise more, for example, or perhaps take a pill or undergo a liposuction operation or some combination of all of those.

In making this decision, you may well act on assumptions that are shortsighted or misinformed. You may ascribe more effectiveness to those interventions that seem easy (taking a diet pill) than to those that seem hard (giving up sweets and sweating it out in the gym more often).

Similarly, you may underestimate the risk that a liposuction will bring with it a hospital infection and other complications that will get you killed. Your decision may also be constrained by lack of money to throw at the problem, or lack of time, or competing ambitions. Yet however imperfectly, your mental energies will be directed at how to achieve your goal of losing those twenty pounds at the least cost in other things that matter to you.

This pattern of "rationing," if you will, our own health and health care on the basis of perceived costs and benefits is arguably a defining feature of what makes us human. 

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