Bush's paltry paragraph-long devotion to health care in the State of the Union was no white flag.  While the rhetoric from the White House appears to be at a whisper, don't be fooled -- Health Savings Accounts (HSA's) have too many vested interests to fade off the radar anytime soon.  Editorials keep appearing on the pages of major newspapers, and Sebastian Mallaby of the Washington Post offered up a fairly strong rebuttal on Sunday.  But he gets one key thing wrong, so I'm going to help him out a bit.

Mallaby says:

In practice, probably less than half of all health spending outside Medicaid and Medicare would be affected by the new consumer-driven discipline.

It's actually much less than half.  American health spending follows the "80/20" rule -- more than 80% of health care spending is caused by less than 20% of the population. 

These are the chronically ill, people with cancer or other life-threatening diseases, and victims of terrible accidents.  When you're that sick, shopping around for the cheapest care isn't a concern.  Your care will blow your deductible (especially if you have individual coverage -- the market average of $1,901 won't even cover the cost of an MRI) regardless of where you get your care. 

This spending rule is the principal reason why HSA's won't be able to reign in the bloated amount we spend on health care.  We spend more than twice per person because our system is rife with administrative costs and inefficiencies -- not because the majority of Americans over-utilize services.  And as estimates put HSA enrollees at only 10% of the population in four years, HSA's won't have near enough penetration to keep costs down.

By the time HSA's have enough penetration to theoretically affect health costs, we'll be on to another policy.  They're just another private-market experiment in American health care -- one that will ulltimately fail and leave us asking, "What next?"