While the folks in Washington talk about how to reform thehealth caresystem, many of the nation's employers and state governmentsare actually making it happen. They are finding ways not only tocontrol costs, but also to provide better care.

The latest example comes from America's heartland - Indiana -where five years ago, newly elected Governor Mitch Daniels askedthat a consumer-directed health insurance option, or HealthSavings Account (HSA), be added to the conventional plans thenavailable to state employees. He thought that the plan may interesta few of the state's 30,000 employees.

Today the HSA option has proven to be popular with more thanjust a few. This year, over 70 percent of the state's workers choseit and with good reason. The employees enrolled in theconsumer-driven plan will savemore than $8 million in 2010 compared to their co-workers inthe old-fashioned preferred provider organization (PPO)alternative. That's a pretty nice pay increase for workers who haveseen their salaries frozen for the last two years.

In addition to saving money on premiums in tough economic times,these Hoosiers are putting lots of cash away in their HSAs - some$30 million or about $2,000 per employee and growing fast.

Most importantly, the state says it is seeing significantchanges in behavior, and consequently lower total costs. Forexample, employees who opted for the HSA are less likely to go tothe emergency room, the doctor or be admitted to the hospital, andthey are more likely to take generic drugs. Skimping on care, arethey? The state says there is no evidence HSA members are morelikely to defer needed care or common-sense preventivemeasures such as routine physicals or mammograms.

Yes, health care reform has already come to Indiana in the forma consumer-directed health plan. It turns out that, when someone isspending their own money, they are indeed far more likely to askthe questions and make rational choices.

Washington might want think about that before it enacts moretop-down balloon squeezing.

Source: Mitch Daniels, "Hoosiers and Health SavingsAccounts; An Indiana experiment that is reducing costs for thestate and its employees," Wall Street Journal, March 1,2010.