Medical Savings Accounts Study
The Ohio Department of Health's Unique Proposal

"Managed Choice: A New Proposal for Health Care Reform" was published in 1994 by the Ohio Department of Health."

This study by Peter Somani, MD, Director of Health for Ohio, and a public briefing presented in Columbus, Ohio, in May of 1994 advances the case for Medical Savings Accounts. The Executive Summary can be found in the Appendix. The theme offered in both the public briefing and the published study is singularly clear—"Putting the Patient First Through Medical Savings Accounts." This study summarizes the continuing problems of health care and the reforms being proposed. It deals primarily with the costs of health care and the factors contributing to their increases. Somani departs from the majority of reform prescriptions that focus primarily on control of supply, added bureaucracy, and even more intrusive forms of managed care.38

Somani offers the concept of "Managed Choice...which blends the best oversight and case management of an HMO, the flexibility and choice of a traditional fee-for-service plan, the personal responsibility and savings of an MSA, and a single entity to handle all transactions." He goes on to state that this "...version of reform promotes preventive health care" with funds set aside expressly for this purpose. Going one step further, Somani reviews the opportunity of offering MSA programs to state employees and even to Medicaid populations as well as the uninsured.

Using existing health benefits cost data for Ohio public employees, Somani projects likely economic results should "Managed Choice" become a staple of state health benefits. In 1994, state covered beneficiaries will number 113,384 for which estimated claims paid and administrative costs will total $197.5 million or $1741.41 per capita (excluding out-of-pocket costs at point of service).

Assuming 60% of public beneficiaries will likely choose MSA programs with the remainder enrolling in current managed care plans, Somani has projected large savings to the state of Ohio. He shows cost savings of $29.8 million in 1994 increasing to $61.2 million in 1998. Projected total savings over the five years from 1994 through 1998 are $231 million.

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org