Healthcare Is Migrating South of the Border
California employers are steering Latinos to Mexico, where care is less costly but uneven
By Richard Marosi, Times Staff Writer
Los Angeles Times

TIJUANA — Thousands of Latinos who live near the border are taking advantage of a benefit increasingly offered by their U.S. employers: cheaper healthcare in Mexico.

About 160,000 California workers — farm laborers as well as working–class Latinos employed at hotels, casinos, restaurants and local governments in San Diego and Imperial counties — are getting their annual checkkups and having surgeries through health networks south of the border, insurers say.

The arrangement is cheaper for both employers and employees. In Mexico, healthcare costs are about 40% to 50% lower than in California, freeing some employers to offer services that they couldn’t otherwise afford.

“It’s a win-win situation for me. I’m able to offer it to everybody, and my premiums went way down,” said Mark Holloway, part owner of a department store in Calexico, Calif., who said he couldn’t afford health insurance for his 50 employees until he enrolled them in a cross-border plan.

He said he can sign up several employees, each at about $100 monthly, for about the same price as one employee in a U.S. plan.

Employees enjoy lower premiums and co-payments, typically $5, and the comfort and convenience of describing their aches and pains in Spanish to doctors who, they say, tend to take more time with them.

“The rate is good, the service is good,” said David Ouzan, a city councilman in Calexico, where about a third of the city’s workers use dental and medical clinics in Mexicali, just across the border. “I myself have used dentists in Mexico.”

Still, the trend has generated some misgivings among doctors and consumer advocates north of the border.

Some worry about the quality of care in Mexico and limited regulatory control.

Others say the cross-border plans represent a sad commentary on the limited access that immigrants and the working poor have to treatment in California.

They represent a “positive turn of events for cross-border health coverage … but are another reminder about how sick our health system is in thhe U.S.,” said Dr. Robert K. Ross, president of the California Endowment, a healthcare philanthropy.

Mexico has long been a low-cost alternative for thousands of people — many of them uninsured — who price-hunt among clusters of storeffront clinics and small hospitals in Tijuana and Mexicali for treatment they can’t afford in the States.

And some cross-border health plans have operated since at least the 1950s, when Imperial Valley farmers started offering coverage to migrant workers.

But the emergence in the last five years of cross-border HMOs, which must be licensed by the state of California, signals the growing acceptance of Mexican doctor networks by mainstream employers and insurers in the United States.

HMOs Cover 36,000

So far, three HMOs, two in the U.S. and one in Mexico called SIMNSA, are providing coverage for employees of California companies, covering 36,000 workers and their dependents, according to statistics provided by the insurers. About two-thirds of those employees are covered by the U.S. insurers, Blue Shield of California and Health Net Inc. (Health Net enrollees can access clinics on either side of the border.)

Since 2000, the number of nonagricultural employers in California offering such health plans has jumped from 165 to about 700.

Employee enrollment in farming association-sponsored plans in Mexico is far greater, though, reaching about 124,000, according to the plans. Though these are not HMOs, they rely on networks of Mexican doctors and hospitals.

Enrollees are typically Mexican citizens legally employed at U.S. companies, either living in Mexico or in the U.S. Many earn only $5 to $7 an hour and could not afford U.S.-based plans. But others are Mexican Americans, some of them in executive-level positions.

“Employers are really surprised a bit by the quality, the cleanliness,” said Peter Duncan, a vice president at Blue Shield of California, whose cross-border program is called Access Baja. “Often they had visions of squalor. It isn’t Cedars-Sinai. But they find that the basic quality of care is really there.”

Mexican facilities that are part of HMO networks serving U.S. companies are audited by the HMOs themselves for sanitary conditions, infection control policies and staff training levels, as required by the California Department of Managed Health Care. They are not directly evaluated by state regulators. Physicians must be licensed in Mexico and maintain a good standing in the medical community.

Still, some medical experts are concerned about what they describe as a wide variation in quality south of the border.

Though comparing the two systems, with their differing standards and philosophies, is difficult, doctors on both sides of the border say the Mexican regulatory system is lax, and doctor training not as rigorous as in the U.S.

In Mexico, doctors typically need six years of schooling; in the U.S., a physician’s education can take eight to 11 years, including college, medical school and possibly a residency training program.

“High-quality [healthcare] does exist in many places,” said Dr. Michael Rodriguez, a UCLA professor familiar with the border region, but “sometimes there are places that you’d wonder whether you would want to take a dog for treatment, let alone a person…. My guess and my hope is that HMOs are veery [discriminating] who they work with.”

Some consumer advocates say the audits done by HMOs themselves potentially create a conflict of interest. And they note that when complaints surface, the state may not have the jurisdiction to thoroughly investigate them. Mexican doctors, for instance, are not subject to regulation by the Medical Board of California.

Medical care in Tijuana, however, has generally improved since 1991, when Mother Teresa fell ill there and had to be taken to San Diego for treatment, said Patricia Aubanel, a U.S.-trained cardiologist who has performed heart surgeries in both countries.

Disreputable clinics touting miracle cancer cures or cut-rate cosmetic surgery still draw thousands of Californians, but a cottage industry of modern clinics and hospitals has developed in recent years that treats ailments ranging from colds to heart disease.

Insurers, employers and many border medical experts insist that the Mexican plans offer an acceptable level of care to a population that prefers healthcare in Mexico, even when offered plans in California.

But for some Latinos along the border, any plan is an improvement.

They are more likely to lack heath insurance than any other demographic group, according to the National Hispanic Medical Assn., and one of the draws of these cross-border plans is that they are a bargain.

Monthly premiums average about $100 for individuals and $350 for families in Blue Shield of California’s Access Baja plan. By contrast, the average monthly premium for California HMO plans was $261 for singles and $721 for families, according to a 2004 survey of employers by the California Healthcare Foundation.

Cross-border programs “seem to be fulfilling an important need, providing quality … healthcare services for very specific populations,” said Evaa Moya, executive director of the U.S. section of the U.S.-Mexico Border Health Commission.

Most cross-border enterprises function like California healthcare plans. Enrollees choose a doctor in Mexico for routine care. In emergency or urgent-care situations they can go to the nearest hospital or clinic in California or Mexico.

Participating employers include San Diego County’s landmark Hotel del Coronado, several manufacturing companies and retailers, and local governments such as El Centro’s Central Union High School District.

In Mexico, some medical offices brim with state-of-the-art equipment. Hospital signs direct patients in English and Spanish. Physicians in those offices say many of their colleagues boast degrees and training from top universities in the U.S. and Mexico.

Tijuana’s rapid population growth has fueled a mini-boom in hospital construction, drawing well-trained doctors from Mexico City and the U.S., say experts in both countries.

Technology Compared

Many facilities’ technology is comparable to that in the U.S., said Dr. Jose Hernandez Fujigaki, a U.S.-trained cardiologist who has performed heart surgery in National City, near San Diego, and, for a fraction of the cost, at the hospital he owns in Tijuana, Centro Medico Excel.

“We’re catching up,” said Fujigaki, adding that the Tijuana hospital can handle almost any surgery except skin grafts and organ transplants.

At Excel’s classroom-size main operating room, a horse trainer was recently wheeled in for a hernia operation. Three nurses in crisply pressed hospital garb spent several minutes meticulously assembling the instrument tray.

The team of three doctors made a small incision, inserted a small scope connected to a special camera called a laparoscope and repaired the man’s abdominal wall. Several visitors watched the procedure on television monitors from the observation room overhead.

Dr. Ruben Flores Diaz said the surgery, along with open-heart and other complex procedures, have been performed hundreds of times at Excel.

“This afternoon, he will leave … and a week from now he’ll be back wwith his horses,” said Flores Diaz, a general surgeon.

Excel’s charges are a fraction of those at U.S. hospitals. The daily charge for room and care in Excel’s intensive care unit is about $1,200. At Scripps Clinic, a large hospital in San Diego, the cost is about $4,000.

Personal Touch

Part of what draws patients south of the border is the very different medical culture. In California, some Latino patients say, care takes longer to get and is not rendered with as personal a touch.

These enrollees, who have received healthcare in both countries, say the U.S. system is too bureaucratic and hurries them out the door.

“Over there [in San Diego], we wait for more than half an hour and they just give us a Tylenol,” said cross-border plan member Guadalupe Briseno, who accompanied her 15-year-old son, Jorge, to the Tijuana clinic of Dr. Teresa Figueroa Garcia.

Garcia, 52, a soft-spoken family practitioner, is one of about 73 doctors in Tijuana affiliated with Access Baja.

Garcia, who shares her suite of offices with her husband, an internist, consults with patients in her office before treating them in an adjoining examination room.

She said she sees about seven patients daily. American doctors, by comparison, may see several times that, according to doctors north of the border.

Rosalia Serratos of Brawley, Calif., couldn’t afford insurance before her husband was hired three years ago at an Imperial Valley farm.

In years past, the family would seek treatment only in emergency rooms.

Now, their Access Baja plan enables them to go to Mexicali doctors, and in emergencies, U.S. doctors. The family believes that it can take advantage of the best from both countries.

Earlier this year, Serratos’ 3-year-old son, Saul, almost drowned in a pool accident and had to be airlifted to San Diego.

U.S. doctors, she said, saved her son’s life.

But for routine care she prefers taking him and her 9-year-old daughter to Mexicali, 25 miles away, where she says the clinics have shorter waits and more attentive doctors.

“I like the way they treated my son in San Diego. They never left him alone,” said Serratos, referring to the near-drowning. But for regular care, she added, “I like going to Mexico.”

Jose Rangel, a San Diego construction worker, said finding a good doctor to treat his lower-back pain was a problem in both countries.

In California, he would wait weeks for an appointment that lasted just a few minutes, he said. The doctors, he said, prescribed an assortment of drugs that only temporarily eased the pain.

In Mexico, the first physician he saw took X-rays and recommended surgery, but Rangel didn’t trust him because he didn’t take time to explain why.

“In Mexico, there are bad doctors just like here,” said Rangel, whose wife and two children also visit Mexican physicians. “It’s like everything else. It’s all about getting a good recommendation.”

Rangel ended up seeing Dr. Felipe Tovar Vasquez, a slim, middle-age back specialist for the Access Baja plan who extracted Rangel’s herniated disc and fused two vertebral bones. The operation was so successful that Rangel recommended the same procedure and doctor to his brother.

“I ended up well, thank God. I was walking two days after the surgery,” said Rangel, who can now painlessly hoist cabinets at his current job.

Tovar, a graduate of Mexico City’s prestigious Universidad Nacional Autonoma de Mexico, said Rangel was one of hundreds of people he had helped. His training and skills, he said, are the equal of U.S. doctors’.

The only difference, he said, is “a lot of money.”

Registered Nurses’ Association of Ontario – Open letter to the Ontario Medical Association

TORONTO, Aug. 17 /CNW/ –

Dr. Gregory Flynn
President
Ontario Medical Association

Jonathan Guss
Chief Executive Officer
Ontario Medical Association

August 17, 2005

Dear physician colleagues,

Ontario nurses have been following the deliberations at the 138th annual meeting of the Canadian Medical Association with much concern. While we were heartened to hear that delegates showed strong support for access to medical care based on need, not ability to pay, we were dismayed that CMA members failed to reject a parallel, investor-driven, for-profit system. The CMA squandered an opportunity to show Canadians that it is committed to continue to put in the time and effort to rebuild and reform our universal, publicly funded and delivered health-care system. That would have shown as much common sense as courageous leadership, and the Registered Nurses’ Association of Ontario would have saluted it. Instead, we are saddened that two-thirds of the delegates rejected a motion calling on doctors to denounce a parallel health-care system as a way to deal with long waiting lists.

As registered nurses working alongside you on the front line of health-care delivery, we are well aware that our system has problems. Evidence and experience from other jurisdictions shows, however, that those problems will only deepen and grow if we increase the role of investor-driven, for-profit health insurance and health delivery in our system. Investor-driven insurance and businesses are already siphoning physicians, nurses, resources and support away from the public system, privileging those who can afford to pay for private health care.

There is little doubt there are those who will benefit by linking profits with illness and suffering. But the most vulnerable people in our community, those who have the least resources and are most likely to need health care, have the most to lose if we allow our single-tier, publicly funded system to be slowly but surely starved of resources and respect. We know that private insurers will “skim” the more profitable cases and burden the public system with chronic and catastrophic care. And anyone who is less than healthy and/or less than wealthy is at risk to receive compromised access to health-care services in a for-profit insurance market. The Canadian Medical Association’s own poll recently showed that 58 per cent of physicians felt that most of their patients will either not qualify or be unable to afford private insurance.

Organizations like the CMA are careful to shun American-style health care, and have turned instead to countries such as Sweden, Britain and Germany for guidance. But this advice ignores the realities of an increasingly integrated North American economy, as well as our formal commitments under NAFTA which may open the door to U.S. corporations if we expand for-profit health care in Canada.

At the same time, the CMA fails to learn from those very jurisdictions it cites. For example, British doctors, representing the National Health Service Consultants’ Association, sent an open letter to the incoming CMA president urging Canadian doctors to “learn from our country’s mistakes and reject private care and other market-style policies.” The letter warns that instead of “saving” public health care, privatization has undermined the National Health Service, raising costs and undermining quality.

Nurses are not interested in protecting the “status quo;” they are unified in their interest to protect the public by strengthening and expanding medicare for all Canadians. As extensive evidence from the Romanow Commission has shown us, the best solution is to “build on our values” by making the public system even more responsive, efficient and accountable to Canadians. Now is the time to accelerate the positive reforms that are taking root with support from a series of Health Accords. These reforms will strengthen public hospitals, community health, access to pharmaceutical drugs, and healthy living. That reform must pick up momentum — boosted by Canada and Ontario’s solid financial performance — but it must serve the needs of all Ontarians, not just those with deep pockets and good health.

Nurses call on their physician colleagues to avoid the mistakes of the past, such as the Saskatchewan MD strike of 1962 that tried to stop the implementation of Saskatchewan’s Medical Care Act — the precursor to medicare. It is unfortunate that four decades later, delegates at this annual meeting have decided not to take a strong stand against for-profit health care, ignoring the will of the vast majority of Canadians. While a parallel, investor-driven system might financially benefit some individual doctors, strengthening the for-profit motive in health care will fray our social fabric and jeopardize quality health care.

As the CMA conference wraps up today, we ask the Ontario Medical Association to show some leadership by taking a strong stand against that which would weaken our health-care system — private health insurance, two-tier, cheque-book medicine — and a strong stand for what will improve it: accelerated health-care reform that improves the quality and access of our health care while strengthening Canadians’ confidence in it.

Respectfully,

(signed)
Joan Lesmond, RN, BScN, MSN
President

(signed)
Doris Grinspun, RN, MSN, PhD (cand), O.Ont.
Executive Director

Cc:
Dr. Ruth Collins-Nakai, President of the Canadian Medical Association
Hon. Dalton McGuinty, Premier of Ontario
Rt. Hon. Paul Martin, Prime Minister of Canada
Hon. George Smitherman, Ontario Minister of Health and Long-Term Care
Hon. Ujjal Dosanjh, Minister of Health
Dr. Deborah Tamlyn, President of the Canadian Nurses Association

For further information: please contact: Sine MacKinnon, Director of Communications, Registered Nurses’ Association of Ontario, Phone: (416) 599-1925, 1-800-268-7199 ext. 209, Cell: (416) 829-6657, smackinnon@rnao.org

http://www.newswire.ca/en/releases/archive/August2005/17/c0949.html

State’s health insurance needs intensive care
By David Lazarus
San Francisco Chronicle
Sunday, August 21, 2005

The United States is spending billions of dollars a year — not including the roughly $60 billion annual tab for the war in Iraq — to fight terrorism.

We’re doing this because terrorists hurt people. The especially proficient ones kill people.

But if keeping people out of the hospital (or morgue) is a primary goal of this lavish spending, how do we explain the catastrophe that is the U. S. health care system?

An increasing number of Americans are going without health coverage as our company-sponsored insurance system continues to erode.

Those without insurance, in turn, are skipping visits to doctors and failing to take preventive measures that could keep an illness from becoming debilitating.

These are two of the findings from a report issued last week by the UCLA Center for Health Policy Research. It showed that the number of California adults covered by company-sponsored health plans is steadily falling.

Perhaps even more troubling, spouses and kids of California workers are increasingly losing health insurance as companies cut back on the scope of coverage.

This is California we’re talking about — the wealthiest state in the wealthiest nation on the planet. And our health care system is failing us.

“California’s problems are the problems of the nation,” said Richard Brown, director of the UCLA center and co-author of the newly released study.

“The cost of health care has continued to increase so rapidly it has outstripped by far workers’ increases in salary and the ability of employers to afford it.”

Indeed, companies that once provided health benefits as a routine matter of employee compensation are increasingly offloading costs on workers in the face of double-digit annual price increases.

Average workers, in turn, are increasingly finding it difficult to provide themselves and their families with the coverage they need to ensure well-being.

More than 6 million Californians now lack health insurance. At the national level, the number of uninsured is a staggering 45 million.

That number will only continue to climb as more companies step back from their traditional role as health-insurance provider.

Rick Wagoner, chief exec of General Motors, told shareholders earlier this summer that GM — the nation’s largest private purchaser of health insurance — will spend $5.6 billion this year on health benefits for workers and retirees.

That’s more than the company spends on steel for its vehicles, and translates to an extra cost of $1,500 for every car or truck produced.

“Our $1,500-per-unit health care expense represents a significant disadvantage versus our foreign-based competitors,” Wagoner said. “Left unaddressed, this will make a big difference in our ability to compete in investment, technology and other key contributors to our future success.”

He added: “It is crystal clear that we need to achieve a significant reduction in our health care cost disadvantage and to do so promptly.”

But how do we do that? If universal coverage for all Americans is our goal, and it must be, what’s the use of pouring more money and resources into a system that’s already out of reach of millions of people and breaking the economic backs of employers large and small?

The answer, obviously, is to admit that the employer-based insurance system that came into being during World War II is no longer capable of accommodating the nation’s health care needs.

“It’s time for employers to take a very close look at a single-payer health care system,” said state Sen. Sheila Kuehl, D-Santa Monica. “They need to see that there is a way to control costs while still providing high standards of health care for everyone.”

Kuehl has introduced legislation — SB840 — that would create such a system in California. The bill was approved by the state Senate in May and is now winding its way through the Assembly.

A single-payer system essentially provides health coverage for everyone, based on taxes collected from companies and individuals. There are no extra co- pays or premiums. Anyone can receive treatment from any doctor at any hospital.

“Single-payer is a really good system,” UCLA’s Brown said. “It’s the most effective way to ensure equity and to control health care spending and costs.”

The beauty of Kuehl’s plan is that it would allow California to serve as a proving ground for the rest of the country. Single payer could be introduced and tinkered with here, then rolled out elsewhere.

Canada adopted a similar approach in gradually expanding a single-payer system to all its provinces. It started with Saskatchewan in the 1940s.

The Canadian system isn’t perfect — far from it. Long waits for treatment are a constant complaint.

Nevertheless, nearly two-thirds of Canadians surveyed still give their health care system a grade of A or B, according to poll results released last week.

When was the last time you spoke with a working man or woman who gave similarly high marks to the U.S. health insurance system?

If anything, the experiences of Canada, Britain and other developed nations that have pursued single-payer systems can show the United States both what works and what doesn’t in shaping a program to meet this country’s needs.

Whatever else, the UCLA study shows that if we don’t do something soon to remedy things, more Americans will go without coverage with each passing year.

“I think we’re finally getting to a point where a significant portion of the business community will stand up and say that it can’t take it anymore,” said Brown. “Maybe that’s when we’ll see something get done.”

David Lazarus’ column appears Wednesdays, Fridays and Sundays. He also can be seen regularly on KTVU’s “Mornings on 2.” Send tips or feedback to dlazarus@sfchronicle.com.

Health Benefits May Cost 12% More
By Kristen Hallam
Hartford Courant
August 16, 2005

American companies may have to pay an average of 12.6 percent more for their employees’ health insurance next year, according to a survey by Hewitt Associates, a leading benefits consultant.

Humana Inc. plans the largest increase, 23.6 percent, and nonprofit Kaiser Permanente the smallest at 10.4 percent, Hewitt found in a survey of employers. The rates are for health maintenance organizations, plans that cover 20 percent of privately insured Americans.

40 percent of employers are proposing to shift more medical costs to workers in the form of higher deductibles and a larger share of premiums, according to the Hewitt survey.

The Hewitt data suggest that employers’ health costs next year may climb at almost five times the U.S. inflation rate.

WellPoint Inc., the biggest U.S. provider of health insurance, is planning an average rate increase of 16.7 percent for employers, the Hewitt survey found.

CIGNA Corp., whose health insurance operations are based in Bloomfield, said earlier this month that about 80 percent of requests from employers are for information about plans that shift a bigger share of costs to workers. CIGNA plans to raise premiums 12.3 percent, the Hewitt survey found.

“You do double-digit increases year over year over year, and we’re now looking at costs of health care going up 80 percent in the last six years,”
said Paul Harris, senior health strategist at Hewitt.

http://www.courant.com/business/hc-insurancerates.artaug16,0,2934551.story?coll=hc-headlines-business

Comment: Although this report is limited to the costs of employer-sponsored HMOs, it is particularly relevant for two reasons. HMOs are designed to provide comprehensive health care services, at least in theory, so HMO premiums reflect more closely the true costs of comprehensive health services than do PPO plans which require greater cost sharing while providing fewer benefits. The other reason that this report is especially relevant is that it reflects pricing resulting from employer/insurer negotiations and therefore represents the lowest premiums attainable for comprehensive coverage, typically about 30% lower than the individual market for comparable benefits.

Our current system of funding health care has placed America’s employers in the front seat in controlling health care cost escalation. But they’re driving us off a cliff!

It’s really not the employers’ fault. They have little control over the structural flaws that are resulting in the outrageous increases in health care costs. It will take a unified system of funding care to bring the system under control. Only then could we hope to effectively tackle problems such as those demonstrated by Wennberg (regional excesses in high-tech capacity) and Starfield (lack of an adequate primary care infrastructure that would improve quality while reducing costs). Only then would we have true monopsonistic power (single purchaser) to demand value for our health care investment (a beneficent power as long as it is our own public monopsony).

General Motors, as the largest private purchaser of health benefits, recognizes that they cannot stop a system headed toward a cliff, and that we need a “national solution.” Imagine what we could do with the nearly $2 trillion we are spending on health care if only we had a rational, national program of health insurance. Comprehensive, high quality care for everyone:
it doesn’t have to be just a dream.

By Michelle Andrews
The New York Times
August 14, 2005

Health savings accounts, a sort of I.R.A. for health care, let people set aside money tax-free to pay for medical expenses, both now and later. But the accounts have been controversial since their introduction in January 2004.

Depending on whom you ask, they are either a wonderful tool to help Americans become wiser, more price-conscious health care consumers, or just another way for employers to pass along more health care expenses to their workers. Critics also contend that the accounts are basically a tax-shelter gimmick for people who are healthy and wealthy enough to invest in them but don’t have to rely on them to cover their care costs.

Most businesses have not yet offered the accounts as an option in their insurance plans. But as health costs continue to climb, some businesses and individuals are more curious to try the idea. Since they were established under the 2003 law that set up a prescription drug benefit for Medicare, more than 425,000 accounts have been established, according to a survey of administrators by Inside Consumer-Directed Care, a newsletter based in Washington, and more than 50,000 are being opened each month.

Nearly a year and a half into the experience, however, it is becoming clear that while the accounts may be a reasonable option for some people, there are potential drawbacks.

A health savings account must be paired with a health plan that meets certain criteria, including a deductible of at least $1,000 for individuals and $2,000 for families. Some employers offer them, although individuals can also apply for a qualifying health plan and open one of these accounts on their own.

Individuals can deposit money into their accounts to cover the deductible and other medical expenses, and employers can also deposit money for employees. Generally, the account balance earns interest, though some accounts allow holders to invest the money in mutual funds or other vehicles.

If an employee leaves his job, the money in his health savings account stays with him. And these accounts, unlike flexible spending arrangements, have no “use it or lose it” rule, so the funds roll over from one year to the next. An account holder pays no tax on withdrawn funds as long as they are used to pay for qualified medical expenses. If the money is used for any other expenses, it is subject to income tax and, for those under 65, to a 10 percent penalty.

Some people are discovering downsides to the accounts. Ric Joyner, president of the National Association of Professional Benefits Administrators, says he has received frequent calls from companies and individuals interested in setting up the accounts. But lately, Mr. Joyner, who is also president of eflexgroup.com, a benefits administration company in Madison, Wis., says he has been getting calls from people complaining that their account balances are shrinking even though they have not used the money.

“The money they’re setting aside for health care is being eaten up by fees,” he said.

Typically, the companies that administer the accounts charge a set-up fee of around $20, plus a monthly fee of about $2 or $3. They may also charge an annual fee, as well as a transaction fee every time a customer writes a check or uses the account’s debit card. Some charge a fee to close an account.

American Health Value, an administrator of health savings accounts, charges a one-time, $15 fee to open an account, and $36 annually to administer it. There is also a $2.50 monthly service charge, which is waived if the balance is more than $2,500.

In the early years of an account, when the balance is typically low, fees can take a relatively big bite out of the total. A new customer with American Health Value who deposited $1,000 during the first year, for example, could expect to pay $45 in fees ($15 to set up the account and $30 for 12 months of service charges at $2.50 each). That $45 far exceeds the $7.50 that the customer would have earned in an interest-bearing account, based on the 0.75 percent now being paid on balances of up to $1,000.

“Unless employers are putting a bunch of money in, I really don’t see how these balances are going to get much bigger,” said Gary Claxton, vice president of the Kaiser Family Foundation, a health care research and education company in Menlo Park, Calif. Some companies permit an account holder to invest the balance in stocks or mutual funds, though a certain minimum balance – say, a few thousand dollars – may be required to do so. Such investments, of course, offer a chance for greater returns – but also the risk of losing money.

There are also ceilings, indexed to inflation, on annual contributions: in 2005, it is the lower of the deductible or $2,650 for individuals and $5,250 for families. Account holders who are 55 or over can also make catch-up deposits. In 2005, the ceiling is $600; it rises gradually to $1,000 in 2009.

But even if you deposit the maximum amounts and don’t touch the money to pay for health care before you are 65, you won’t accumulate enough to cover medical expenses in old age, according to an analysis by the Employee Benefit Research Institute, a nonprofit research organization based in Washington. In a model created by the institute, a 55-year-old who set aside the annual maximum – as well as catch-up contributions – starting in 2004 would save $44,000 in 10 years, assuming a 5 percent return. If that person lived to 80 and had retiree health coverage, he would need anywhere from $137,000 to $337,000 to cover premiums and out-of-pocket medical expenses, according to the institute’s analysis.

Investing in a health savings account at an earlier age won’t solve the problem, said Paul Fronstin, the institute’s director of health research and education and a co-author of the report.

“The gap is only going to get larger,” he said, “because of the way that health care costs are increasing compared to how much you can put in.”

THE amount saved is not the only concern. There are other wrinkles that can trip up consumers. For example, health savings accounts cannot be used with many flexible spending arrangements offered by employers.

In addition, some states have laws that conflict with health savings accounts. Those laws may require, for example, that certain types of medical care be covered under plans before the deductible is applied. States have until Jan. 1 to bring their laws into line with the federal law, and many have done so already.

Prescription drug coverage poses a problem for many people who are considering whether to open health savings accounts. Starting in January, many prescription drug expenses in qualified plans will be subject to the deductible. Now, consumers typically pay only a portion of the drug costs from the outset.

Mr. Joyner said the idea of paying more out of pocket for prescription drugs made his employees reject the idea of health savings accounts. “They didn’t like it that there wasn’t going to be a drug card,” he said.

Many major insurers and banks now offer the accounts to individuals and companies. But details like fees and investment options vary widely, as do the basics of the accompanying health plans. “The biggest drawback about H.S.A.’s is that they can be very confusing,” said Martha Priddy Patterson, a director for Deloitte Consulting.

Because these accounts are still relatively new, and changing fast, the best advice may be to read the fine print before opening one.