The right remedies.(America's Health Care Crisis Solved: Money-Saving Solutions, Coverage for Everyone)(Book review)

America's Health Care Crisis Solved: Money-Saving Solutions, Coverage for Everyone, by J. Patrick Rooney and Dan Perrin (Wiley, 242 pp., $29.95)

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THE "ownership society"--a key concept of today's conservatism--is premised on a reversal of the government takeover of major life-cycle functions such as health care, education, and retirement security, through policies that promote individual asset ownership. Two of the titans of this movement are J. Patrick Rooney and John Bogle, the fathers, respectively, of Health Savings Accounts (HSAs) and indexed, whole-market mutual funds.

Bogle created a vehicle through which the average wage-earner could participate fully in the gains of the stock market, outperforming 75 percent of professionals and minimizing transaction fees. Rooney's HSAs enabled families to purchase health care that covered more and cost less than the low-deductible, over-regulated insurance plans prevalent in the post-World War II market. And both men became pariahs in their industries--Bogle in mutual funds, Rooney in insurance--because they spoiled everyone else's fun. The money they saved consumers came at the expense of hosts of professional gatekeepers, regulators, and lobbyists.

It is unusual that the progenitor of an idea serves also as its historian, and as a practical tipster on its use. America's Health Care Crisis Solved is Rooney's legacy tome. A leading theoretician in the movement to reintroduce market forces into health care, he was indisputably the prime mover (aided by his current coauthor, Dan Perrin) of the legislation that enacted such reforms. And he remains a major marketer of the insurance products that resulted.

Health Savings Accounts, now owned by more than 6 million Americans, were once described by conservative think-tanker John Goodman as "IRAs on steroids." They combine a high-deductible, major-medical insurance policy with a medical savings account, contributions to which are tax-free, accumulations to which are tax-free, and expenditures from which are tax-free. Such accounts can halve the cost of insurance and reduce overall out-of-pocket health-care costs by 20 to 60 percent, depending on the age at which they are started.

HSAs generate other benefits as well. Because the insurance component of his health-care budget has been halved, the HSA owner is insulated from disproportionate inflation in the insurance market. Moreover, the "savings account" portion of the plan can be applied to health-related items not typically covered in a major-medical plan--e.g., dentistry, optometry, transportation to medical appointments. And the family deductible of an HSA can be allocated as needed to individual family members (another Rooney innovation).