If you like health savings accounts, you are going to love “Putting Our House in Order: A Guide to Social Security and Health Care Reform,” the new book by former Secretary of State George Schultz and Dr. John B. Shoven, director of the Stanford Institute for Economic Policy Research.

I missed the press conference at which the book was unveiled this morning, but attendees received advance copies at home and copies of the book are on every table at this conference. Its authors are keen on getting wide attention to their ideas so I share their summary of the health initiatives needed to put the house in order, Schultz-Shoven style:

Private system

• Encourage national, rather than state, markets in health insurance, thereby promoting competition, putting downward pressure on costs, and providing reasonable choices of covered services.
• Promote enhanced consumer information about health service prices and quality. Medicare records on the quality of hospitals and health service providers and the effectiveness of alternative treatments should be made public while the privacy of individuals is protected.
• Strengthen the incentives for company-sponored HSAs and accompanying catastrophic insurance by making them portable across employers and permitting tax-deductible health spending for those who have fully participated in an HSA program.
• Make tax-advantaged HSAs and relative low-cost catastrophic insurance available to all those who do not have employer-sponsored plans.

Medicare

• Offer consumer choice among plans (Kaiser-style HMO plans, high-deductible catastrophic insurance plus HSAs, and traditional Blue Cross-type plans.)
• Use smart means testing: Value of vouchers would depend on lifetime labor earnings.
• Ensure gradual transition: Existing Medicare participants would be allowed to stay with traditional coverage.
• Finance with dedicated taxes, thereby promoting cost effectiveness.

Medicaid

• Provide risk-adjusted vouchers.
• Continue to allow states to experiment with structure.
• Offer consumers choices, including HSAs with catastrophic insurance.
• Provide increased coverage: Replace eligibility notch with phased reduction of the value of vouchers.
• Finance federal support with dedicated taxes, thereby promoting cost-effectiveness.