Yu-Chu Shen and Glenn Melnick detailed the rise and fall of HMOs and managed care in a paper titled, "Is Managed Care Still An Effective Cost Containment Device?" They write that the managed care industry enjoyed a period of rapid growth in the early-1990s fueled by concerns of rising health care cost during that period. They noted that the success managed care plans had controlling health care costs was a result of them adopting aggressive strategies, including the use of primary care gatekeepers, negotiating deep discounts with providers and restricting access to providers outside of the network.

Shen and Melnick point out that such aggressive strategies had, by the later part of the 1990s, created a deep mistrust in consumers. Also, they say that negative portrayals of managed care plans in the media further created a chasm between managed care and consumers/providers, even when a consumer might not have felt dissatisfied with his or her own health plan.

This product life cycle has been summed up as managed care's boom period (1990-1994), its mature period (1994-1998), and its backlash period (1998-2003).

Managed care plans were successful at first, not so much because employers and employees thought they were great plans, but because they were cheaper. However, when employees got their fill of the restrictions imposed by these plans they voted with their feet, and carriers and employers shifted to plans that gave members more freedom to schedule specialist visits and other services. This so-called "backlash" period also happened to coincide with the lowest unemployment rates in 31 years and the longest period of growth in American history.

This brings me to my point about HSAs hitting the mainstream. We have to ask ourselves, once these plans achieve widespread use, does the danger exist that they could experience a managed care-type backlash should unemployment rates suddenly return to early-2000 levels and the news media were to start picking up on stories of hardships that could potentially result from the higher deductibles? In other words, now what?

The "now what" is for those of us who sell and administer HSA plans to step up our efforts to provide ongoing education to employees so they grow in their understanding of how HSA plans work and how they are a vast improvement on what was available in the past. Employees who understand that they are saving money, reducing their taxes and being given much greater control over how they access health care are not likely to reject these plans should we ever return to a human resources seller's market.  

If the adoption and popularity of these plans can be driven by higher levels of consumer and even provider satisfaction, maybe, just maybe, they will stick around long enough to show that they really can lower costs by making employees smart health care consumers rather than just patients.