Medical savings accounts (MSAs) and similar approaches based on flowing reimbursements through individuals/consumers rather than providers are unsuited for systems with universal coverage. Data from Manitoba, Canada reveal that, because expenditures for physician and hospital services are highly skewed in all age groups, MSAs would substantially increase both public expenditures and out-of-pocket costs for the most ill. The empirical distribution of health expenditures limits the potential impact of many current 'demand-based' approaches to cost control. Because most of the population is relatively healthy and uses few hospital and physician services, inducing the general population to spend less will not yield substantial savings.