Consumer-driven health care, based on health savings accounts and high deductible health insurance policies, seems to be the next big thing in U.S. health policy. Long supported by conservative and libertarian advocacy groups, it received a big-boost with the HSA tax subsidy provisions of the Medicare Modernization Act. The question remains, however, whether consumer-driven health care can really bring down health care costs while improving quality and access, as its supporters claim that it will.

This article examines the experience of South Africa, where medical savings accounts have long been available and are widely used. It concludes that South Africa's experience is not terribly encouraging. It is not clear that MSAs have been successful in controlling costs there, and they certainly have not expanded access. It is likely that they have rather tended to break down risk-pooling and to assist insurers in achieving favorable selection. South Africa's experience does not support, therefore, expanding the use of consumer-driven health care in the United States, though South Africa's situation is so different from ours, that there might be little we could learn from it in any event.