Patients as consumers: courts, contracts, and the new medical marketplace

The persistent riddle of health-care policy is how to control the costs while improving the quality of care. The riddle's once promising answer--managed care--has been politically ravaged, and consumerist solutions are now winning favor. This Article examines the legal condition of the patient-as-consumer in today's health-care market. It finds that insurers bargain with some success for rates for the people they insure. The uninsured, however, must contract to pay whatever a provider charges and then are regularly charged prices that are several times insurers' prices and providers' actual costs. Perhaps because they do not understand the healthcare market, courts generally enforce these contracts. This Article proposes legal solutions to the plight of the patient-as-consumer and asks what that plight tells us about market solutions to the health-care quandary.     

The slippery slope of health care finance: business interests and hospital reimbursement in Massachusetts

In 1988 Massachusetts enacted a bill, popularly known as Health Care for All, which promised that by 1992 every Massachusetts resident would have available affordable insurance for basic medical expenses. This legislation was one of a series of laws enacted over a period of six years which progressively improved access to care for the uninsured. The policy process which led to the enactment of these laws was strongly influenced by the interests of large employers. This article describes the series of access-expanding hospital reimbursement changes in Massachusetts in the 1980s and traces the connection between the involvement of business interests in the policy process and the outcomes that occurred; that is, it follows the slide of employers down the slippery slope of health care finance. The article also describes a potential implementation strategy for the Health Care for All legislation.     

Leading the health policy orchestra: the need for an intergovernmental partnership

The past decade provides a useful window through which to examine whether states are likely to provide health care leadership. During this era, states were given increased discretion to set health care policy, they had the financial resources to encourage innovation, and their administrative capacity was at its strongest ever. Despite the favorable conditions, however, states were reluctant to spend their own funds on programs for the uninsured, their efforts to make private insurance more affordable for the small business community were disappointing, and their efforts to regulate the managed care industry fell short. At the same time, though, the most promising innovations over the past decade were in programs financed primarily with federal dollars, administered primarily by state officials, and advanced by an intergovernmental partnership in which administrators at different levels of government prod each other to try and do more. This sort of intergovernmental partnership provides the best model for innovative health policy leadership.     

The politics of universal access: the Massachusetts Health Security Act of 1988

This article analyzes the passage of an unprecedented state law, promising every resident access to affordable health insurance. The Massachusetts Health Security Act of 1988 was the product of a set of political and financial pressures that had been developing for nearly a decade. Hospital, insurance, and business interests were unable to reach a new accommodation on hospital payment. This logjam created the opportunity for a policy breakthrough, but did not inherently lend itself to progressive reform. It was consumer activism that forced the traditional powers in health policy to address the interests of the uninsured. By imposing a more public-interest agenda on the process, consumers were able to change the configuration of the stalemate, but could not resolve it. The particular terms of the stalemate, however, made possible a new, more aggressive role for state government in health policy. Unable to satisfy their competing interests within a policy framework that had universal access as a goal, traditionally powerful interest groups found themselves increasingly dependent on the state to broker a new agreement. While the many concessions made to these groups are likely to prove to be the bill's undoing, the unraveling of the agreement will not end the story. The same pressures which led to passage of the Massachusetts law and which are now causing other states to act will continue to exert their effect until a more durable solution is found.     

How do uncompensated care pools affect the level and type of care? Results from New York State

Uncompensated care pools have been used by several states in their attempt to aid hospitals and increase the volume of care provided to patients without health insurance. We examined the uncompensated care pool used in New York State between 1983 and 1987. Our primary interest was to estimate the impact of the pools on the level and type of care provided to uninsured patients. Our results indicate that hospitals responded to the pools by increasing the volume of care provided to uninsured patients. Without the pools, over 30,000 fewer adjusted hospital admissions would have been provided to the uninsured in a typical year. Many of these newly purchased admissions were for "nondiscretionary" medical care, suggesting that beneficial care to the indigent was rationed prior to the introduction of the uncompensated care pools.     

Chronic disease and disadvantage: the new politics of HIV infection

HIV infection is now perceived as the end stage of a chronic disease that is spreading most rapidly among blacks and Hispanics. The politics of the HIV epidemic in the 1980s were dominated by four interacting factors: fear and fascination; who had the disease and to whom it seemed to be spreading; the endemic problems of United States social policy; and the impact on policy of advances in scientific knowledge. This paper analyzes the political history of each of these factors and describes the dominant policies of the federal government and the states regarding HIV in the areas of surveillance, prevention, research, and financing. Four uncertainties will have a profound influence on the future politics of the HIV epidemic: how the states and the federal government will address the general problems of paying for the care of people with chronic diseases and providing access to care for the uninsured and the underinsured; the number and distribution of the sexual behaviors that transmit infection with HIV and the effectiveness of policies to persuade people to modify these behaviors; precisely who uses addictive drugs and the effectiveness of measures to change their behavior; and the natural history of the virus.     

An insurer's perspective on reform

Individual health insurance markets differ from state to state, and as a result approaches to individual market reforms need to be different. In evaluating approaches, policy makers need to remember that since the decision to purchase health insurance coverage is voluntary, the potential for adverse selection exists. In addition, rather than putting the focus of individual market reforms almost exclusively on access to health insurance for a small number of persons with high-cost health conditions, more attention needs to be put on how to decrease the number of uninsured persons. This includes making the premiums paid for individual health insurance 100 percent tax deductible, similar to those of employer-based health insurance. Finally, market reforms need to treat all types of coverage issued in the individual market the same, whether they are purchased direct for the insurer or through an out-of-state association.     

Does all-payer rate setting work? The case of the New York Prospective Hospital Reimbursement Methodology

By 1983, four states had received waivers from the Health Care Financing Administration and adopted experimental reimbursement programs covering all third-party payers. In general, these programs were designed to moderate cost growth as well as to promote a number of broader distributive objectives. Among the concerns for equity were financing uncompensated care and spreading the costs across all payers, reducing the differential between hospital charges and costs, and rejuvenating fiscally distressed hospitals. These diverse goals represent a fundamental shift in the role of state rate setting; as a result, broader outcome measures are required to determine their overall impact. The New York Prospective Hospital Reimbursement Methodology (NYPHRM) is evaluated in this broader context. The NYPHRM successfully channeled revenues to fiscally blighted hospitals, increasing the volume of care to the uninsured while maintaining cost growth at national levels. According to this broader set of outcome measures, the NYPHRM would be viewed as a policy success.     

Improved access to care for the uninsured poor in large cities: do public hospitals make a difference?

This study compares the volume of uncompensated care provided to the uninsured poor in cities with public hospitals to that provided in cities without a public hospital in order to determine whether public hospitals increase access to care. Multiple regression analysis is used to control for selected variables that also influence utilization of hospital care. Cities with public hospitals were found to provide between 31 and 34 uncompensated adjusted admissions per 100 uninsured poor; in cities without a public hospital, 24 such admissions were provided. In the regression analysis the coefficients for dummy variables representing three types of public hospital governance structures were all positive and statistically significant. The coefficient measuring teaching commitment among a city's hospitals was also positive and statistically significant. This analysis suggests that local tax support for public hospitals does not merely offset philanthropic or other revenue sources for voluntary hospital uncompensated care but is also likely to increase the amount of uncompensated care offered. We also find that public hospital closures may reduce access to care for the uninsured poor in large cities.     

Executive federalism and Medicaid demonstration waivers: implications for policy and democratic process

Executive federalism emphasizes collaboration between the executive branches at the national and state levels to transform grant programs through the implementation process. In this regard, Medicaid demonstration waivers loomed large during the presidencies of Bill Clinton and George W. Bush. This article documents and compares the volume and substance of section 1115 Medicaid waiver activity under the two presidencies. From the perspective of policy performance, Medicaid demonstration waivers provide modest support for the view that states serve as laboratories for policy learning in the health care arena. More broadly, the waivers have not yielded a major solution to the problem of the uninsured and are unlikely to do so. At the same time, they have not (as some have suggested) been a subterranean force for the erosion of Medicaid. To the contrary, these waivers have often enhanced health services for low-income people; above all, they have helped preserve Medicaid as an entitlement by undercutting support for those seeking to convert the program into a block grant. From the perspective of the democratic process, we find that Congress has been a more significant player in shaping waivers than the executive federalism model suggests. While the decision processes surrounding Medicaid waivers often fall short of democratic standards with respect to transparency and opportunities for public input, they still compare favorably to certain alternatives.     

All-payer rate-setting and the provision of hospital care to the uninsured: the New Jersey experience

The New Jersey all-payer prospective payment system compensates hospitals for charity care and bad debts. This study examines its impact on the provision of care to self-pay patients. Self-pay patients include two types of uninsured individuals: (1) patients who cannot afford to pay their bill and (2) more affluent patients who can afford to pay but who evade collection. Using data for the period 1979-85, the study employed a sample of seventy-nine New Jersey hospitals that entered the all-payer system during the years 1980-82. A regression equation, which included independent variables to control for the community's pool of uninsured residents and the hospital's share of this pool, was estimated for the number of self-pay discharges. The results indicate that the volume of care provided to self-pay patients increased when the New Jersey all-payer system was introduced. The results also show that teaching hospitals and facilities in urban areas discharge a disproportionately large number of self-pay patients. Analysis of the operating margin ratio suggests that the all-payer system helped to restore the financial viability of hospitals that tend to provide larger amounts of services to the uninsured.     

Health insurance for Americans approaching age sixty-five: an analysis of options for incremental reform

This article provides a systematic evaluation of the options for incremental health insurance reforms aimed at older Americans nearing age sixty-five. It presents three basic arguments for giving special consideration to this age group: (1) early retirement and its effect on access to employer insurance; (2) changes in health and health care expenses associated with increasing age; (3) the vulnerability to unexpected economic or health "shocks" that will affect people throughout their retirement. The analysis of policy options begins by specifying criteria for evaluating alternative approaches to reform. The proposed criteria emphasize that reforms for this age group should be designed to fit with other financial plans and decisions made during such a transitional stage of life. Policy options should be judged according to fundamental goals such as equity and efficiency, not simply ranked according to the number of uninsured who will gain coverage. After offering a comprehensive catalog and evaluation of available options, the analysis identifies and discusses a preferred approach-which preserves choices while offering universal and subsidized access to Medicare before age sixty-five.     

A dose of reality: assessing the Federal Trade Commission/Department of Justice report in an uninsured, underserved, and vulnerable population context

Despite the size of their report, the Federal Trade Commission and Department of Justice pay virtually no attention to tens of millions of uninsured and underinsured persons. By focusing on an increasingly rarified group of health care customers--healthy, affluent, and highly insured--the report takes on an untethered quality, with only the slightest tip of the hat to its own limitations. Furthermore, the report overstates the extent of legal constraints on the market, in particular, the degree to which the market is free to select its customers and tailor its goods and services to the best risks. By miscasting the legal context of the American health care system, the report ultimately undermines much of its potential value.     

代位求偿权与被保险人剩余赔偿请求权何者优先——兼对英国《海上保险法》中相关规则的反思

海上保险大多是定值保险,在保险标的价格大幅度上涨的情形下,保险赔偿往往是不充分的;同时,在海商法领域,民法中的全部赔偿原则并不适用,船舶所有人、船舶经营人等享有海事赔偿责任限制的权利,因此,对被保险人负有责任的第三人的赔偿数额经常不足,从而导致保险人的代位求偿权与被保险人未受保险赔偿部分的请求权都无法得以满足。在此种情况下,是应当优先保证保险人代位求偿权的实现,还是被保险人未得到保险赔偿部分的损失应首先得到赔偿？抑或按比例受偿？这个问题充满争议。根据MIA 1906规定,在足额保险的情形下,保险人的代位求偿权优先;在不足额保险的情形下,保险人与被保险人应按比例分摊第三人的赔偿额。对这一结论进行深刻反思,并指出代位求偿权不同于一般的债权转让,依据债权平等的一般民法原理解决这一难题是不妥的,只有根据代位求偿权的立法目的才能妥善解决这一难题,同时基于对中国法的客观解释得出＂被保险人优先＂的结论。     

American health policy: cracks in the foundation

Much American health policy over the past thirty-five years has focused on reducing the additional health care that is consumed when a person becomes insured, that is, reducing moral hazard. According to conventional theory, all of moral hazard represents a welfare loss to society because its cost exceeds its value. Empirical support for this theory has been provided by the RAND Health Insurance Experiment, which found that moral hazard--even moral hazard in the form of effective and appropriate hospital procedures--could be reduced substantially using cost-sharing policies with little or no measurable effect on health. This article critically analyzes these two cornerstones of American health policy. It holds that a large portion of moral hazard actually represents health care that ill consumers would not otherwise have access to without the income that is transferred to them through insurance. This portion of moral hazard is efficient and generates a welfare gain. Further, it holds that the RAND experiment's finding (that health care could be reduced substantially with little or no effect on health) may actually be caused by the large number of participants who voluntarily dropped out of the cost-sharing arms of the experiment. Indeed, almost all of the reduction in hospital use in the cost-sharing plans could be attributed to this voluntary attrition. If so, the RAND finding that cost sharing could reduce health care utilization, especially utilization in the form of effective and appropriate hospital procedures, with no appreciable effect on health is spurious. The article concludes by observing that the preoccupation with moral hazard is misplaced and has worked to obscure policies that would better reduce health care expenditures. It has also led us away from policies that would extend insurance coverage to the uninsured.     

Mass screening in low-income populations: the challenges of securing diagnostic and treatment services in a national cancer screening program

Funding for many mass screening programs for low-income and uninsured populations provides resources for screening tests, yet only rarely does it provide coverage for necessary follow-up diagnostic and treatment services. The National Breast and Cervical Cancer Early Detection Program (NBCCEDP), a federally funded initiative that provides cancer screening to low-income uninsured and underinsured women, covers some diagnostic follow-up tests and no treatment services. We conducted in-depth case studies of seven state programs participating in the NBCCEDP to investigate the strategies and approaches being used to secure diagnostic and treatment services. The results suggest that the program relies on a patchwork of resources--at state and local levels--to provide diagnostic and treatment services. This includes a number of components of local safety nets, all of which are unstable and have uncertain futures. Public health disease-screening initiatives need to reconsider the feasibility of continued reliance on case-by-case appeals to the local safety net for diagnostic follow-up and treatment services.     

The role of tax exemption in a competitive health care market

The Federal Trade Commission and Department of Justice 2004 report on competition in health care raises the issue of nonprofit versus for-profit form in several contexts, including their relative financial performance, pricing behavior, and role in caring for the uninsured poor. The report, however, does not discuss in detail the connection between tax exemption and the nonprofit/for-profit debate. Is tax exemption, for example, "buying" charity care for the poor, and would withdrawal of exemption negatively impact health care for the uninsured poor? Or is tax exemption justified on the grounds of other nonprofit behavior outside the financial realm and thus not considered by the report? If nonprofit status does not result in differential financial behavior (as the report concludes) and if competition will end the ability of hospitals to cross subsidize free care for the poor (as the report speculates), is there any reason to retain tax exemption for nonprofit hospitals? This article summarizes the debate on these issues and offers some alternatives to the current structure of tax exemption for nonprofit health care providers.     

Hill-Burton: the unfulfilled promise

The poor and uninsured encounter numerous barriers to health care access. The Hill-Burton Act of 1946 required many hospitals to make their services available to all persons, yet ineffective enforcement has limited the utility of the act's requirements. Hill-Burton hospital audits have revealed widespread facility noncompliance. In light of these findings, alternative enforcement procedures should be considered.     

The fundamental law that shapes the United States health care system: is universal health care realistic within the established paradigm?

In this article, the author draws from his own experience as a doctor in describing the issues the uninsured patient population faces. Pointing out that neither the U.S. Constitution nor case law provides a positive right to health care, the author describes the parameters of federal health care funding and ultimately concludes that universal health care cannot be fully achieved in the U.S.     

Medicare program; Part A premium for 1993 for the uninsured aged and for certain disabled individuals who have exhausted other entitlement--HCFA. Notice

This notice announces the hospital insurance premium for calendar year 1993 under Medicare's hospital insurance program (Part A) for the uninsured aged and for certain disabled individuals who have exhausted other entitlement. The monthly Medicare Part A premium for the 12 months beginning January 1, 1993 for these individuals is $221. Section 1818(d) of the Social Security Act specifies the method to be used to determine this amount.