Archive for the ‘Health Law’ Category

What would LBJ do?

posted by Spencer Waller

I am almost done with Robert Caro’s Master of the Senate, his magnificent biography of the years Lyndon Baines Johnson served in the United States Senate. This is the third volume of his-yet unfinished biography of the life of LBJ. This work in progress is now approximately 2500 pages long and has not even covered the years where LBJ was Vice-President and President.

All three volumes focus on Johnson’s ambition for power and leadership. Master of the Senate begins with the history of the Senate and its role in our Constitutional structure as the place where dramatic political and social change goes to die – by design. Even after Senators were directly elected, the longer terms, the rules of the Senate, the role of seniority, committee chairmanships, the ease of filibuster, and the difficulty of cloture have made the Senate a unique institution.

Caro focuses mostly on two developments in the years between 1948 and 1960 before Johnson was elected Vice-President. First, was his meteoric rise as the first (and possibly last) Senate Majority Leader to wield true power. Second, was his burning ambition to be the first Southerner to be elected President since the Civil War.

These two developments combined in Johnson’ epic struggle to pass the Civil Rights of Act of 1957. Out of burning ambition, but also a complicated attitude toward race that was different than most Southern Senators, Johnson wanted, needed, some, any, civil rights legislation to lay the foundation for a run for the White House in 1960. Passing such legislation meant a weak enough bill so the Southern Bloc (his bloc as Caro makes clear in detail) wouldn’t filibuster, and yet enough of a bill that the Republicans, Northern liberals, and Western Democrats could support. To ensure passage, and no filibuster, Johnson had to stitch together a coalition that had never been successfully created on civil rights from the Jim Crow era on.

Caro lays out the cajoling, wheeling, dealing, strong arming, and compromising in the fight for the civil rights bill as well as the complicated linkages between the civil rights bill and other legislation to obtain LBJ’s winning coalition. Among other things, Johnson brokered a deal between Western Democrats who wanted public power and conservative Southern Democrats who wanted the most watered down civil rights bill possible. The Southerners voted for a public power bill they had previously opposed, but did not filibuster the emerging civil rights bills once key changes were made. The Southerners opposed the bill on the floor and voted against it, but would never used the one weapon which could have killed it entirely. The Western Democrats got their public power (at least in the Senate) and supported watering down the civil rights bill which would not hurt them politically back home in that era. Northern Democrats eventually were reconciled to the fact that some bill was better than nothing and Southern Democrats were reconciled to the fact that some bill was inevitable.

Does this remind you of anything currently going on in the Senate? We are seeing the same type of struggle now play out in the Senate over health care reform. Only a fraction of the sausage making is taking place in public, but the same issues of power, leadership, and strategy seems to be unfolding. Some bill, any bill, will probably ultimately pass. Obviously Harry Reid is no LBJ, but the demographics of the House, Senate, and White House are different enough that something is likely to emerge.

But the issues of power, leadership, and strategy remain. Is some bill better than no bill? Is this the first step to more comprehensive reform down the road? Is the watering down of the public option to build coalitions within the Democratic Party, and perhaps a couple of Republicans, leadership, weakness, or just rent seeking? While we will never know, what would LBJ have done on health care, and will we ever see the likes of him as a legislative leader again?

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Thanks to Danielle, Dan, and the rest of Concurring Opinions for the chance to blog for the month of October. I look forward to the new group of guest commentators for November including my Loyola-Chicago colleague Mike Zimmer.

  October 31, 2009 at 6:58 pm  Tags: Civil Rights, filibuster, Harry Reid, health care, LBJ, Lyndon Johnson, Majority Leader, Master of the Senate, Robert Caro, Senate  Posted in: Civil Rights, Current Events, Health Law, History of Law, Politics, Race   Print This Post   No Comments

The Limits of Competition and the Rebirth of the Public Option

posted by Frank Pasquale

It’s now official—even Senate leaders are attaching a public option (albeit one with an opt-out) to their proposed health reform bill. Dan Balz of the WaPo asks “What brought the public option back to life?” While Balz focuses on the chess game of Washington politics to explain the public option’s resurgence, I detect deliberative democracy at work.

As Congressional committees have begun to specify exactly how “competition” among insurers would lower costs, they’ve realized that we need to do a lot more than increase regulatory scrutiny and add insurers to the mix. Rather, just as Medicare took care of elderly persons unlikely ever to be profitably covered by private insurers, a new option is needed to address the needs of impoverished or sick citizens unlikely ever to pay profitable premiums to Aetna, Cigna, and their ilk.

Why wasn’t this apparent earlier? I think that closer scrutiny for a proposal to repeal the “antitrust exemption” for insurers has led to more serious consideration of what competition can and cannot do in the health care industry. As antitrust expert Tim Greaney explains, “the Supreme Court has narrowly interpreted McCarran-Ferguson requirement that only the ‘business of insurance’ is exempt; hence insurers’ actions vis a vis providers are not exempt.” Lack of antitrust enforcement—and the market competition it’s supposed to bring—can’t fully explain insurers’ failures here. Some commentators believe that application of antitrust laws to physicians and hospitals in the mid-1970s may even have spurred the development of a “medical-industrial complex” capable of displacing professional norms with profit-driven practices.

Mere promotion of competition, without more, also creates other dangers. Enforcing antitrust laws aggressively against insurers, while failing to balance that effort with similar scrutiny of providers, could lead to even higher health care costs. Do we really expect piecemeal antitrust enforcement, played out in fragmented and uncoordinated courts, to manage such balance? It is often the case that both providers and insurers are concentrated, powerful, and earning supracompetitive profits (whatever “supracompetitive” means in a realm so thoroughly marbled with regulation, subsidy, and barriers to entry).

Insurers are competing in many markets—they’re just frequently doing so in ways that are socially unproductive. As I have noted before, there are effective competitive strategies for insurers that reduce social welfare overall. Given that the average insured stays in a plan for less than three years, the marketplace rewards insurers who put hurdles in front of expensive preventive care, or scramble to drop those with extensive medical needs. It also exacerbates the coverage crisis that necessitates health reform in the first place.

Genuine health reform will provide incentives for insurers to do things that actually improve individual and public health—programs such as transparent physician rating, preventive and chronic care programs, and intensive data analysis to promote evidence-based medicine. Like the V.A., a public option can be ordered to do such things. Moreover, it can be required to cover the costly or unprofitable individuals that private insurers won’t touch. The government might “require” private health insurers to do the same, but I would not count on overwhelmed regulators to enforce such laws adequately.
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  October 26, 2009 at 8:22 pm   Posted in: Health Law   Print This Post   2 Comments

Appearing for the Defendant, $186,416.00: Medical Marijuana, State Law, and the Fourth Amendment

posted by Deven Desai

The Ninth Circuit just issued an opinion about the interplay between state law enforcement, federal law enforcement, the Fourth Amendment, and state law.

The LAPD obtained a warrant to search a licensed medical marijuana facility. The LAPD did not, however, tell the judge that the place to be searched was licensed. The search proceeded. Around 209 pounds of marijuana, 21 pounds of hashish, and 12 pounds of marijuana oil were seized along with $186,416.00. The facility wanted the money back, but it had been turned over federal law enforcement and forfeiture proceedings were started. If forfeited, the city stood to gain about 80 percent of the money. The Ninth Circuit The Ninth Circuit’s ruling (pdf) has the full details. This passage seems to sum up the problem and the way in which the LAPD erred.

While there may have been probable cause to search UMCC for a violation of federal law, that was not what the LAPD was doing. Nothing in the documents prepared at the time the warrant was obtained from the state court or in the procedure followed to obtain that warrant supports the proposition that the LAPD thought it was pursuing a violation of federal law. Instead, it sought a warrant from a state court judge, though, as the District Court found, it lacked probable cause for a state law violation and failed to inform the state court judge of relevant facts that supported the conclusion that UMCC was not in violation of state law. The LAPD, a city agency, never initiated the process of seeking a federal search warrant from a federal magistrate or indicated that it was pursuing a violation of federal law.

I defer to Fourth Amendment scholars as to whether this ruling makes sense. Nonetheless, it seems that the federal government’s new policy might mean that state or local government that wants the federal government involved in going after medical marijuana facilities will have to persuade the federal government that a facility is not complying with state law. That requirement seems to match what the Ninth Circuit is saying state and local law enforcement groups should do with state judges in the first place.

  October 21, 2009 at 7:25 am  Tags: Fourth Amendment, medical marijuana  Posted in: Criminal Law, Criminal Procedure, Health Law, Privacy (Law Enforcement)   Print This Post   No Comments

Medical Marijuana: A Wild Ride on Federal and State Law

posted by Deven Desai

The Justice Department has announced a policy memo about how it will handle medical marijuana. The full memo is on The Justice Blog and in pdf here. As AP summarizes the DOJ will go after medical marijuana operations that exceed state laws or are fronts for criminal acts. At the same time, the New York Times reports that Los Angeles is thinking of cracking down on its more than its estimated 800-1,000 (yes 800-1,000) dispensaries. It seems that many are not adhering to the law that allowed them to exist. For example, many are turning a profit which apparently is not allowed; they must be non-profit. One dispensary in Oakland that adheres to the law has revenues of around $20 million. As the Times reports in other states such as New Mexico, licensed sites still encounter vague and contradictory rules as couriers can be stopped by border patrol and the medical marijuana confiscated even though the delivery is authorized. My colleague Alex Kreit does some great work on drug policy and certainly knows more about it than I. Luckily he will be guest blogging here in the near future. For now I will point folks to his op-ed Yes: It’s Time To Rethink Marijuana Prohibition. It is a thoughtful approach to what to do about marijuana (and has some fascinating figures about how many Americans use marijuana). For me, the recent moves by the federal and state governments seem to indicate that some better system is required to allow the medical use of the drug. The inconsistent standards and enforcement within each state is not great. The more difficult question is how much will medical marijuana be seen as using the federal system to let states test public policy choices? If one adds in same-sex marriage to the question, it seems that federal and state laws are entering a new phase regarding how they interact. I say that because it seems to me that the open divergence between federal and state systems with the possibility that the federal government will ignore or defer to states on national issues is new. In other words, these two issues seem analogous to prohibition and civil rights; yet they are managed differently. I could easily be wrong on this idea. I welcome thoughts and leave sorting out the implications of this possible change to the constitutional law folks.

UPDATE: Lori Ringhand’s comment helped me refocus my thoughts. As she notes (and I was trying to capture but apparently did not), there are of course ebbs and flows in this dynamic. Maybe the better way to ask my question is whether we are seeing a shift towards more deference to states. Again it may not be possible to verify this notion. In addition, it may be that the large social issues are catching attention more than the day-to-day issues. If so, the question may be further refined as are large scale social issues being left to the states a little more than they were from around the 1930s to the 1970s?

Image WikiCommons, Public Domain

  October 20, 2009 at 6:47 am  Tags: medical marijuana  Posted in: Constitutional Law, Health Law, Politics   Print This Post   3 Comments

Principles for the Health Reform Homestretch

posted by Frank Pasquale

House and Senate leaders will soon have to reconcile several different versions of health reform bills. The bills are complex, but some simple principles should guide the process of integrating them into a final product. As the press reports on a whirlwind of proposed laws, we need to ask of any particular proposal: Does it . . .

1) Increase productive competition in health care? Everyone talks about “increasing competition” among insurers and providers, but there are many ways to compete. Hospitals and doctors can game the reimbursement system. Insurers may not directly discriminate against the sick, but can find other ways to keep high-risk patients out of their plans, as even the most market-oriented health policy experts realize:

[T]o avoid patients with costly, complicated medical conditions, health plans could include in their networks relatively few doctors who specialize in treating those conditions, said Mark V. Pauly, professor of health-care management at the University of Pennsylvania’s Wharton School.

Both the Netherlands and Switzerland have already experienced problems in this area, even though the Netherlands has implemented risk-adjustment methods (which attempt to deter such “cherrypicking” and “lemondropping”) far more serious than anything proposed in current bills in the US. As Karen Pollitz has repeatedly argued, we’re going to need a much greater investment in insurance regulation to make any reform bill work.

2) Make it easier for uninsured or underinsured individuals to buy coverage? Many of the proposals for allocating and awarding subsidies for coverage sound exceedingly complex. We’re hearing about serious limitations on access to exchanges, subexchanges, burdensome “free rider” provisions, etc. Any particular provision may sound good in the abstract, but taken as a whole they could become an obstacle course that makes obtaining insurance coverage a miserable and exasperating experience for those supposedly aided by reform. During the second Bush administration, hundreds of thousands of children eligible for subsidized health insurance were not enrolled because states failed to make enrollment convenient enough for time- and cash-strapped parents. As Liebman and Zeckhauser remind us, “we must design systems for mere mortals, not the people who inhabit the models of traditional economists.” What seems easy to one of DC’s privileged elite can be very hard for an overworked mom or minimum wage-earning service worker.
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  October 4, 2009 at 8:17 pm   Posted in: Behavioral Law and Economics, Health Law   Print This Post   One Comment

Health Care Crisis

posted by Jon Siegel

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In December 2005, I was on a group biking tour of California wine country when I got going too fast on a steep downhill, couldn’t quite make it around a sharp left turn, went off the road, and fell over. My last thought as I went down was, “oh, this won’t be so bad, I’ve slowed down considerably.” The next thing I remember is being loaded onto a stretcher. I have no memory of anything in between, but I’m told that after my friends revived me (I was out for about a minute), I tried to get back on the bike and had to be restrained. Thank heavens, I was wearing a helmet.

An ambulance took me to the hospital. I looked like something out of a horror movie (photos here), but in the end the only real damage was that I broke one small bone in my left hand, which the doctors taped up. My ribs were pretty sore, but the doctors couldn’t quite tell whether any were broken. They thought not, but since there’s no treatment for ribs anyway, they didn’t bother to make certain. The hospital did a CAT scan, and the doctors said, oh, there might be some bleeding in your brain, we’d better keep you overnight. So I stayed overnight (in a semi-private room), and then the next morning, they did another scan and said, no, everything’s fine, that first scan must have been a false positive, go home. They did another scan in there somewhere to check for broken bones. And they gave me some pain medication and cleaned me up generally. And that was it. No surgery or anything like that.

So. Three scans, pain medication, tape for the broken bone in my hand, and not quite 24 hours in the hospital. Go ahead and take your wildest guess how much that would cost.

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  September 17, 2009 at 6:44 am   Posted in: Health Law, Uncategorized   Print This Post   5 Comments

Your Tax Dollars At Work

posted by Jon Siegel

The New York Times reports today that people who suffer from ALS (Lou Gehrig’s disease), and who require a technological device to assist them with speaking, may be able to get their insurers to spend $8,000 for a Medicare-approved, dedicated computer that has all functions other than speech assistance disabled, but they can’t get an insurer to spend $450 on an iPhone with a speech app.  Medicare won’t approve iPhones because they can be used by people who aren’t ill.  (Strictly speaking, it’s up to private insurers to decide what to do, but many of them follow Medicare’s lead, according to the article.)

This sure sounds like a classic example of excessive “command and control” regulation where a “standards” based regulation would serve everyone better.  If an insurer will cover specific device at a certain costs, I’m hard pressed to understand why the insurer and its patients won’t be better off if the insurer approves any cheaper device that performs the same function.  Could this be some of the “waste, fraud, and abuse” that President Obama hopes to squeeze out of the health care system?

I suppose insurers are afraid of fraudulent claims by patients who really just want free iPhones.  But with a cost difference of over $7,500, insurers could spend a couple of thousand dollars investigating each claim and still come out way ahead.

Or are we just offended at the thought that insurance would buy a sick person something that everyone wants anyway?  I don’t know how many patients need this kind of device, but if we could save $7,500 apiece I’d be happy to get over my annoyance.

  September 15, 2009 at 12:06 pm   Posted in: Health Law, Uncategorized   Print This Post   3 Comments

Health care systems kill people. So what?

posted by Nate Oman

As the debate over health care reform slogs on, a particular kind of argument has become quite familiar.  It goes something like this:

Health care system X is a bad system because it kills people.

In support of this assertion, we are then treated to a set of anecdotes about how this or that person died as a result of this or that health care system break down.  Hence, we see critics of Obama’s proposals trotting out horror stories about how NHS bureaucracy resulted in the death of this or that Briton’s loved ones.  Likewise, we see supporters of health care reform unearthing heartbreaking stories of how the American patchwork of private insurance and Medicare or Medicaid killed off dad or mom.  My question is, “So what?” Read the rest of this post »

  September 15, 2009 at 7:48 am   Posted in: Bioethics, Health Law, Tort Law   Print This Post   3 Comments

My Disaffection with Advance Directives, and Maybe Autonomy Too.

posted by Kathleen Boozang

I just started teaching the Law of Death and Dying for the umpteenth time.  I’ve always more or less been a part of the cadre of (former in my case) hospital lawyers who advocate for everyone to have an advance directive so that doctors know what they’re supposed to do when you’re incompetent and life and death decisions must be made.  Innumerable studies suggest the Advance Directive experiment hasn’t worked, but we haven’t come up with anything better, and in certain populations (those for whom death in the next decade is a statistical probability due to age or diagnosis), they can help with decision-making.  The war in Iraq has caused me to become much more skeptical about Advance Directives.

Rebecca Dresser of Washington University in St. Louis employs personal identity theory to oppose exclusive reliance on  advance directives, arguing that the competent, functioning person who decides what health care she should receive, say, fifteen years hence is not the same person to whom these directives will apply.  That is, that the person now in a nursing home with Alzheimer’s Disease  who no longer recognizes his wife or children but seems basically content , is not the same “person” who executed the Advance Directive a decade or two ago with a dread of incompetence.

I have tossed my students into this debate every year.  Last year, I unequivocally took the position that Dresser is right, to the consternation of most of my students.  The prior semester, one of my (somewhat older) students was preparing to ship out to Iraq with his National Guard unit. That he enrolled in Death & Dying his semester before deployment was a remarkable thing to me, but I went with it, and we talked quite a bit about advance directives for soldiers. I even toyed with the idea of training law students to assist my student’s unit in preparing their own Advance Directives – this war’s soldiers are much more likely than those of prior wars to return home brain-injured – their torsos are pretty well protected by armor, but they still lose limbs, and the many soldiers who would previously have died are returning home with brain injuries.

But the more I learned about these  soldiers, the more convinced I became that at least for these very young adults leaving for Iraq, Dresser must be right.  There is no way an 18 year old transitioning from his high school foot ball field to boot camp, getting ready to ship out, is the same person as the injured and incompetent (otherwise the Advance Directive would be irrelevant) soldier returning to Walter Reed or a rehab institute.  While my experience with war and soldiers is pretty limited, I found myself unwilling to help the young men and women, many of whom are younger than our students, pre-plan what their treatment decisions were should they got blown up by an IED.

And of course, you can imagine the outrage of most of my students, almost none of whom ever conceived of the remote possibility they’d be plopped down in Iraq or Afganistan. But by rejecting Advance Directives for soldiers, I was refusing to respect their (my students as much as these soldiers) autonomy and constitutionally protected right of self-determination (actually, the constitutional jurisprudence is not so straightforward as they would have it).  To them, I was essentially arguing for a return to paternalism , upending the decades of progress by the adherence to the doctrine of informed consent and patient autonomy.

They are right.  I have become disenchanted with power we accord autonomy.  Sometimes other principles should prevail, and sometimes a decision is patently wrong or irrational or transient.  I can’t bring myself to aid an 18 year old who should be on a date at the movies prospectively decide whether he’s willing to live a life without legs, or imagine whether she can tolerate living with the consequences of brain injury.  My veteran student returned to school this semester.  I look forward to testing my new perspective on him.

  September 9, 2009 at 6:16 am   Posted in: Health Law   Print This Post   8 Comments

Seeing With Your Tongue: No Really

posted by Deven Desai

Not much law here, yet. Researchers have taken theoretical work begun decades ago and developed a “brain port,” a device that uses technology to allow people to reorganize how they process sensory data. In the example below, blind people are able to see images. The device takes visual input, processes it, sends impulses to a pad that sits on someone’s tongue, and then the person is able to see some images. It takes quite a bit of training and in some cases folks have been able to use the device such that they actually re-train the brain and can reduce use of the device. Yes in a sense they have “rewired” their brain. This advance is just cool. The video also explains that the advances in this field trace to Professor Paul Bach-y-Rita who apparently had to overcome a fair amount of resistance in his fields of neurobiology and rehabilitation, because he was challenging many accepted beliefs regarding the way the brain works and more (all hail Kuhn). Will the law become involved in this area? It probably already is insofar as patents and copyright are being used to govern the technology. In addition, as I have noted before, the advances in embedded or sensory enhancing devices raise numerous questions regarding privacy, the ownership of data, bioethics, and research ethics. So welcome to the future and take a look at the video. It really is amazing and wonderful that scientists have made these breakthroughs. At the very least, anyone questioning how basic research can lead to unforeseen benefits should pause after seeing this work.

  August 28, 2009 at 6:01 am  Tags: Privacy, sensory substitution, singularity  Posted in: Health Law, Intellectual Property, Privacy, Privacy (Medical), Technology   Print This Post   No Comments

Swine Flu Prevention? Alternatives to Shaking Hands

posted by Deven Desai

The concern over swine flu is high and with reason. The CDC’s new report suggests that as many as 50% of Americans could be infected and 90,000 deaths may occur this flu season. The precautions that the CDC recommends are:

* Stay informed. [The CDC website] will be updated regularly as information becomes available.
* Influenza is thought to spread mainly person-to-person through coughing or sneezing of infected people.
* Take everyday actions to stay healthy.
o Cover your nose and mouth with a tissue when you cough or sneeze. Throw the tissue in the trash after you use it.
o Wash your hands often with soap and water, especially after you cough or sneeze. Alcohol-based hands cleaners are also effective.
o Avoid touching your eyes, nose or mouth. Germs spread that way.
o Stay home if you get sick. CDC recommends that you stay home from work or school and limit contact with others to keep from infecting them.
* Follow public health advice regarding school closures, avoiding crowds and other social distancing measures.

A news report on ABC today, however, suggests that this version of the flu may be more easily transmitted by contact. Another report notes an apparent oddity about trying to avoid close contact including kissing and the probably misunderstood claim that one should wear a surgical mask when close contact is necessary, for example while kissing.

So I wonder whether people will start to refrain from shaking hands. Some claim the handshake was a way of showing that one is not armed. The custom of shaking hands is strong and not shaking hands would probably not go over well. Still maybe embracing placing one’s hands together in a namaste position (see image) or the allegedly terrorist fist bump would be ways to greet folks and reduce the risk of spreading germs.

Image 1: WikiCommons; by Saptarshi Biswas; Creative Commons Attribution 2.0 License.

Image 2: Wikicommons; Public Domain

  August 25, 2009 at 3:12 pm  Tags: fist bump, H1N1; namaste  Posted in: Health Law   Print This Post   4 Comments

Politicized Prognostication at the Congressional Budget Office

posted by Frank Pasquale

Back in 2007, wise wonks were already warning that the Congressional Budget Office could torpedo health reform. The CBO dealt Clintoncare a heavy blow by saddling it with huge cost projections — and failing to take into account the savings the program would realize for individual citizens and the private sector. Current CBO director Doug Elmendorf has been riding a wave of notoriety as an objective “referee” in an increasingly bitter reform battle. But as his office’s one-sided estimates enervate reform, it’s beginning to risk its reputation for impartiality. Consider the following observations about CBO’s work:

Bruce Vladeck: “The CBO’s track record in predicting the effects of health legislation is abysmal. Over the last two decades, the CBO has routinely overestimated the costs of expanded government health care benefits and underestimated the savings from program changes designed to reduce expenditures. Most recently, it overestimated the five-year cost of Medicare Part D — the prescription drug benefit — by more than 35%. Even more dramatically, the CBO’s estimates of the Medicare savings from the Balanced Budget Act of 1997 underestimated the impact, on average, by a full 100%. That’s right: In the BBA’s first three years, Medicare spending fell fully twice as fast as the CBO had projected.”

Timothy Stoltzfus Jost: “[A] moment’s reflection would lead one to realize that the CBO’s guess that [a reform proposal] would save [only] $2 billion is about as worthless as an estimate that a loaf of bread will cost $5.65 in 2019, or a gallon of gasoline $4.73. Indeed, the CBO admits as much, stating that it actually believed the proposal would save nothing, but “there is also a chance that substantial savings might be realized.” . . .[T]he media needs to stop reporting CBO reports as though they reflect the real costs of reform.”

Maggie Mahar: “When I read Elmendorf’s testimony suggesting that the [House] bill wouldn’t bend the trajectory of federal health spending, I couldn’t help but wonder: Did he understand how the proposals in the 1,018 page bill dove-tailed with the excellent recommendations that the Medicare Payment Advisory Commission (MedPac) has made in recent years? Has Elmendorf read the lengthy MedPac reports?”

When respected experts like Maggie Mahar are wondering if Elmendorf has understood key literature in the area, something’s gone wrong at CBO. The media’s uncritical acceptance of his figures can only last as long as it fails to report the true complexity and uncertainty involved in both substantive reform and the do-nothing option that CBO’s handiwork is unintentionally advancing.

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  July 28, 2009 at 7:19 pm   Posted in: Health Law, Philosophy of Social Science, Politics   Print This Post   7 Comments

Is the House’s Proposed Health Surcharge Progressive Enough?

posted by Frank Pasquale

The usual suspects are alarmed by the House Health Reform Bill’s proposed surcharge on high income earners. As the NYT explains with some examples, “Starting in 2011, a family making $500,000 would have to pay $1,500 in additional income tax to help subsidize coverage for the uninsured. A family making $1 million would have to pay $9,000.” The surcharge rises with income, and over time, to hit 5.4% (by 2013) for households earning over $1 million annually. Households making between $280,000 and $500,000 per year would only face a 2% surcharge by 2013.

Beneath all the sturm und drang about soaking the rich, the press should focus on three underlying realities. First, income and wealth vastly increased at the top of the distribution over the past thirty years — in part because of corporate cost savings that included denial of health coverage to millions of workers. Second, inequality itself exacerbates the health care crisis, by fueling the allocation of medical care according to profit potential, not need. Third, inequality causes health problems, because societies grow “more dysfunctional, violent, sick and sad if the gap between social classes grows too wide.” The surcharge on the rich is not some random resentment inflicted by Frenchified Madame DeFarges on America’s John Galts. The surcharge will itself help address some of the problems health reform is designed to solve. I’ll unpack these thoughts in a series of posts this week.

Nevertheless, the surcharge is not progressive enough, and this should be the main message of liberals commenting on the House bill.

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  July 16, 2009 at 6:32 am   Posted in: Health Law, Tax   Print This Post   6 Comments

Perils of a “Lightly Regulated” Insurance Market

posted by Frank Pasquale

I’ve addressed the “ostrich economics” of Gregory Mankiw on this blog before. Mankiw’s “Pitfalls of a Public Option” is yet another contribution to the genre. Mankiw argues that no public option in insurance is necessary, since “We don’t need government-run grocery stores or government-run gas stations to ensure that Americans can buy food and fuel at reasonable prices.” Paul Krugman’s response:

Economists have known for 45 years — ever since Kenneth Arrow’s seminal paper — that the standard competitive market model just doesn’t work for health care: adverse selection and moral hazard are so central to the enterprise that nobody, nobody expects free-market principles to be enough. To act all wide-eyed and innocent about these problems at this late date is either remarkably ignorant or simply disingenuous.

Krugman actually understates just how unconventional the economics of health care can be. Given these divergences from standard market models, Brad Delong may well be right to say that even Friedrich Hayek could approve the idea of a public plan: it’s a way “to use the market as an institutional discovery mechanism.”

Of course, most modern-day Hayekists are more likely to take Mankiw’s view than Delong’s; namely, that “private insurers, lightly regulated to ensure that the market works well, would offer Americans the best health care at the best prices.” We have a sense of how concentrated the private insurance industry and providers are. What exactly does “light regulation” look like in that context?

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  July 1, 2009 at 6:59 am   Posted in: Health Law   Print This Post   6 Comments

The Rationing Scare

posted by Frank Pasquale

The opposition to real health reform boils down to two lines of attack: 1) the government will spend too much money and bankrupt us or 2) the government will spend too little money and ration our care. To the extent I can find people who make the first point while also opposing the many recent tax giveaways to the very wealthy, I’ll try to engage them. The rationing point is more interesting, but needs to compare reform proposals to the status quo–not some big rock candy mountain of free and fabulous care for all.
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  June 27, 2009 at 10:08 am   Posted in: Health Law, Uncategorized   Print This Post   No Comments

Announcing: Health Reform Watch Blog

posted by Frank Pasquale

Now that we’ve got a critical mass of posts, I just wanted to announce Health Reform Watch, a project of the Seton Hall’s Center for Health & Pharmaceutical Law & Policy. We’ve been honored with some great contributions, including:

Tim Greaney on competition in the insurance market.

Tim Jost on the prerequisites for a successful co-op compromise.

John Jacobi on public plans and chronic care.

Nathan Cortez on comparative health reform.

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  June 25, 2009 at 2:03 pm   Posted in: Health Law   Print This Post   3 Comments

Paging Dr. Gawande: Health Reform Matters.

posted by Frank Pasquale

Atul Gawande’s article “The Cost Conundrum” has become a cause celebre in policy circles. The Obama White House is reading it, leading journal Health Affairs has sponsored a roundtable on it, and pundits across the political spectrum are invoking it.

There are good reasons for all the attention in health reform circles. But there’s a paradox here, too, because Gawande doesn’t believe that changes to health care finance and regulation can deter the wasteful and uncoordinated provider behavior which he sees at the root of the present crisis. I respectfully disagree. Law may not be doing a good job at this now—largely because health care regulators over the past 20 years vastly overestimated the degree to which the market would improve quality and access. But we have a rare window of opportunity to correct for those assumptions. Moreover, without real reform, the profit-obsessed providers who are the villains of Gawande’s piece will systematically outcompete the integrated delivery systems he champions. Gresham’s Law applies in health care, too.

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  June 24, 2009 at 6:51 am   Posted in: Economic Analysis of Law, Health Law   Print This Post   One Comment

The Power to Walk Away From Medicare and Medicaid

posted by Frank Pasquale

Health policy experts Mark A. Hall and Carl Schneider have recently published a policy brief on “provider price gouging.” I’m familiar with Hall’s extraordinarily wide-ranging and insightful work on health care law, and this research shows once again why he is at the cutting edge of the field. It offers the following findings:

Debates about reform have scrutinized the health-insurance market, but they have neglected a crucially defective feature of the medical marketplace — the way doctors and hospitals charge patients when prices are not set by regulation or by negotiation with insurers. . . .

A comprehensive analysis of data hospitals report to Medicare shows that, on average, hospitals charge uninsured patients two-and-a-half times more than they charge insured patients and three times more than their actual costs. In some states mark-ups average four-fold.

This empirical research confirms what antitrust scholars long suspected: merged hospitals and increasingly powerful single-specialty groups would have a great deal of power to set prices. That’s one reason the “cost shift hydraulic” leaves private insurance payments around 122% of hospital costs, while Medicare pays about 100%.

What’s the end game for ultraprofitable specialties and dominant hospitals?

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  June 22, 2009 at 9:27 pm   Posted in: Health Law   Print This Post   No Comments

Health Reform Update: What is the Senate Finance Committee Up To?

posted by Frank Pasquale

Slate’s Timothy Noah boils down the latest Senate Finance Committee Bill as follows:

It appears designed to achieve two contradictory goals: to lower the bill’s cost and to reassure the insurance lobby. These are achieved at the expense of extending and improving Americans’ access to health care, which some might say is the whole point of passing a reform bill. . . .

As Paul Krugman observes today, “relatively conservative [Senate] Democrats still cling to the old dream of becoming kingmakers, of recreating the bipartisan center that used to run America.” They may be at the center of the political spectrum in their states, but they’re ignoring the views of the “eighty-three percent of Americans [who favor] ‘creating a new public health insurance plan that anyone can purchase.’”

If there was only popular support behind the public option, perhaps the Senate would be properly serving some function of “political conservation.” However, a growing consensus of health law and policy experts sees the need for a public option as well. Tim Greaney has been making the case compellingly; here’s his latest installment:
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  June 22, 2009 at 7:25 am   Posted in: Health Law   Print This Post   One Comment

A Win For Lessig on Health Reform?

posted by Frank Pasquale

I admit to having been skeptical of Larry Lessig’s move from cyberlaw to anti-corruption work. It’s a veritable Augean stables of influence on Capitol Hill, and key Supreme Court decisions seem to foreclose real reform. However, Lessig has recently shown the potential of distributed Web 2.0 technology to get key leaders to rethink their position on donors’ pet issues:

[S]ome . . . think they’ve figured out a way to use the Web to pressure [Senator Ben] Nelson, whose big contributions from the health-insurance industry and banks has made him a target. . . [Larry Lessig's] organization, Change-Congress.org, is claiming its first “major victory.” In early June, Nelson backed off from his comment that a public option for health insurance was “a deal breaker” and let it be known that he would not join any filibuster against the president’s health-care bill. Lessig says this came after ChangeCongress announced it would spend $10,000 in online ads and send 3,000 direct-mail pieces to Democratic donors in Nebraska pointing out that Nelson received more than $2 million from special interests in health care who oppose the public option.

Several innovative groups are following similar strategies on the state level. At the national level, Little Sis, Sourcewatch, and Political Friendster have all tried to tell the corruption story in interesting ways. But people in Nelson’s office still say these issues bring in nothing like the attention raised by guns and abortion, and Jonathan Alter concludes that Lessig “needs at least 5,000 to 10,000 more [letter-writers] per congressional district before he can begin to make good on his boast of making a powerful senator quiver and quake.” The ultimate effect of Web 2.0 on real politics remains to be seen.

  June 18, 2009 at 11:53 am   Posted in: Administrative Law, Health Law, Politics   Print This Post   No Comments

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