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9 thoughts on “Wendy’s HSA experience”

  1. Trapier,
    That’s not true.
    How are HSA’s supposed to save money? It’s two-fold.
    The first is by lower premium costs versus traditional insurance.
    The second is the idea that patients will spend less because they are absorbing more of the cost.
    These aspects together should certainly be enough to make health costs under HSAs lower over the previous year.

  2. And there is the additional unseen cost of HSAs or any other plan that discourages regular doctor visits and routine preventative care: the increased cost of delayed care.
    For the average consumer of healthcare HSAs don’t make a whole lot of sense.

  3. Right, as I said over at your blog, Kate, HSAs should be both translating the spending curve (i.e. moving it down the y-axis) and flattening the slope (i.e. reducing year-over-year spending increases). Therefore Wendy’s should absolutely be reducing total costs by switching from traditional to HSA coverage. If their spending came out the same, then Wendy’s is only saving 10% and screwing their employees in the process. Not a good deal, overall.

  4. Trap – Kate said it better than I could. total premiums should go down substantially as the deductible increases substantially. And, if the HSA works, then consumers should be more judicious about their health care expenditures.
    That said, one case does not a trend make, nor do we know enough about the Wendy’s experiment to be able to confidently state x+y=z.
    That doesn’t mean we can’t disagree w your statements about HSA’s overall impact on health care premium expenses.

  5. I’m with Trapier, here, even though I’m no big fan of HSAs. I talk to about 15 different health plans a month, and I’ve never had one tell me that going full-replacement into a CDHP plan would actually provide a year-over-year cost decrease for an employer. Only that it would halt the 15-, 20- and in the case of my employer this year, 35-percent, annual cost increases, and bring them into a more manageable mid- to low-single-digit year-over-year increase, the 4- to 7-percent range being typical. For most employers, this is fine, as most companies grow their revenues year-over-year by more than that amount.

  6. No, your math is definitely right.
    The problem is that your conclusion doesn’t do anything to hurt Matthew’s claim that “introducing the HDHP is a one time saving for companies that were ponying up for the full premium.”
    They’re saving Wendy’s 10% one year, and then it’s off to the races of double-digit inflation after that. I guess saving 10% isn’t nothing, but it seems like even proponents of HSAs such as yourself are arguing that it’s a good thing even if it will delay the industry’s insolvency by only a year.

  7. Rick, if the total cost increase for HSAs is only 4-7%, then they would be the savior we’re looking for. As long as it’s not that the company’s costs go up 5% while the employees costs go up 25%, which most HSA-critics believe will be the case.
    Also, it seems almost impossible to believe that the increase could be that low for HSAs AND that you couldn’t lower your overall nominal spending by switching from traditional to HSA. Which leads me to believe that the low-single digit increases projected for HSAs are fantasies.

  8. “At the end of the first year with HSAs, more than 90 percent of Wendy’s employees had positive balances in their savings accounts. Medical claims through this company have decreased by 17 percent since they’ve implemented HSAs. After more than five years of health care costs going [up] at double-digit rates, Wendy’s overall health care costs rose only by 1 percent last year. ”

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Joe Paduda is the principal of Health Strategy Associates




A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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