07 Sep HSA’s and Medical Devices
My dentist has been recommending I purchase an electric toothbrush, and I recently relented. I’ve never used one before because they seemed overly complicated for brushing one’s teeth, and this one is particularly “whiz-bang”. For an MSRP of $160, it has an LCD battery meter on the brush, a wireless recharging base, and a secondary wireless LCD with real-time communication with the brush. $160 is significantly more than the $3 you spend on a regular, old fashioned toothbrush, which got me thinking about why a company would design such an expensive toothbrush.
Health Savings Accounts
The Health Savings Account (HSA) is a rather new invention that pairs a high-deductible insurance plan with a pre-tax savings plan for medical expenses. The HSA covers more than just deductible-using doctor’s visits. One can also use it to buy vitamins, toothbrushes, over-the-counter medication, and more, making them pre-tax expenditures. And, money that isn’t used stays in the HSA where it can be rolled into an investment account for retirement. Has this new financial innovation impacted the development of medical devices?
Non-reimbursable medical expenses
So, how does having an HSA change one’s purchasing decisions? As an HSA user myself, I find that I’m less likely to consider the long-term implications of spending a few extra dollars on medical expenses, which is precisely the opposite of what the HSA is supposed to accomplish. I know I’m supposed to be asking about the costs of medical products and services, but it almost feels inappropriate. So, I asked Ben Lane whether he found it was any different for his family. Is his family asking how much a test costs or limiting their doctor visits due to the expense?
“I have been living in the traditional culture of insurance for so long that I just continue to operate in that same mode. That means I pretty much do what the doctor says without much discussion of cost. Ultimately, I want my family to be healthy, and I don’t want costs to impact my medical decisions, even though maybe they should. In addition, it’s very difficult and time consuming to be informed about medical costs. It’s not like I can comparison shop very easily. Seems like this needs to change and maybe it already is.”
Ben tends to agree with me. In the end, I can’t use the money to buy the kids video games (okay, they’re for me), and I haven’t saved enough to be able to invest the money, yet. So, perhaps my tolerance for purchasing more expensive medical devices, like this toothbrush, is higher than it would be for, say, a $300 24-volt drill. However, I think I lack the psychological background or introspective skill to really understand my sub-conscious mind.
How this affects device design
Whatever price point the market will bear has a major impact on the performance and features of a device. Metal gears, LCD’s, and wireless charging stations all cost money, money that has to be added to the retail price. If consumers are willing to spend more on a medical device you’re designing because they’ll be making that purchase via an HSA, that’s going to affect the design specification.
Am I off base? If you’re using an HSA and/or designing medical devices, I’d love to hear how this new innovation has affected your spending habits and design constraints.