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Category: Health Law

From the New Property to the New Responsibility

apple small.jpgJust as Charles Reich was a premier theorist of rights to government largesse, Peter Schuck and Richard Zeckhauser are leading exponents of the responsibilities it entails. In Targeting Social Programs, S&Z focus on the denial of benefits to “bad bets” and “bad apples:”

Bad bets are individuals who are likely to benefit little from social resources relative to other [beneficiaries]. . . . Bad apples are individuals whose irresponsible, immoral, or illegal behavior in the past—and predictably, in the future as well—marks them as unsuitable to receive the benefits of social programs.

This may sound a bit cold-hearted at first, but S&Z make a good case that, behind a veil of ignorance, we’d quite sensibly allocate resources to, say, the transplant recipient who is most likely to benefit, rather than the one who has been on the wait list the longest. They also show how often “bad apples’” worst effects are on the disadvantaged citizens near them. (For an example, see Kahan and Meares on anti-loitering ordinances.)

The West Virginia Medicaid program provides an interesting case study of “bad apple screening.” Consider the fate of one beneficiary who refuses to sign a “health responsibility contract:”

Mr. Johnson. . . goes to a clinic once a month for diabetes checkups. Taxpayers foot the bill through Medicaid . . . [b]ut when doctors urged him to mind his diet, “I told them I eat what I want to eat and the hell with them. . . . I’ve been smoking for 50 years — why should I stop now? . . . This is supposed to be a free world.”

Traditionally, there was little Medicaid could do to encourage compliance. But now, “[u]nder a reorganized schedule of aid, the state, hoping for savings over time, plans to reward “responsible” patients with significant extra benefits or — as critics describe it — punish those who do not join weight-loss or antismoking programs, or who miss too many appointments, by denying important services.” But as the article notes, “Somewhat incongruously, [Johnson] appears to be off the hook: as a disabled person he will be exempt under the rules.”

Critics claim the program is unduly intrusive: “What if everyone at a major corporation were told they would lose benefits if they didn’t lose weight or drink less?” asked one doctor. Certainly in some manifestations it could be; consider this 1997 proposal by Judge John Marshall Meisburg:

Congress should . . . consider legislation stipulating that no one can be granted disability by SSA if s/he continues to smoke against the advice of his physician, and smoking is a factor material to the disability, because such claimants are bringing illness and disability upon themselves. Such a law would reduce the burden of proof now needed to deny benefits to persons who fail to heed their doctors’ advice, and would dovetail with legislation just passed by Congress to abolish disability benefits for persons addicted to drug and alcohol. In many cases, smoking is akin to “contributory negligence” and the SSA law should recognize it as such. [From Federal Lawyer, 44-APR FEDRLAW 56 on Westlaw.]

I think S&Z frame the debate in a nuanced enough way to avoid this kind of draconian proposal. But I do have a few quibbles with the framing of their work, if not its substance.

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Medical Self-Defense or Bidding War?

kidney.jpgEugene Volokh’s paper on “medical self defense” has raised a spirited discussion at the Volokh Conspiracy, centering today on the degree to which we permit individuals to take risks in order to make money. Volokh’s paper argues that a “right of medical self-defense . . . makes the organ sales ban presumptively improper and unconstitutional when the organs are needed to protect people’s lives.” But he concedes that “some concerns about organ markets may justify regulations of such markets.” I’m interested in Volokh’s concessions on the regulatory side, particularly his (hedged) sensitivity to distributive concerns.

Volokh addresses “the concern that allowing payment for organs would let rich patients buy up all available organs, and leave poorer patients without the chance of a transplant.” He addresses the issue as follows:

The “rich outbidding others” concern only arises if (1) the rich or their insurers pay so much that other health care funders can’t keep up, and (2) the other funders’ payments don’t suffice to make enough organs available for all patients. Even if we think this is likely—if we think the rich would pay $200,000 per kidney, other health care funders wouldn’t pay more than $100,000, and this payment wouldn’t yield enough organs for everyone—this only supports capping payments at the level that all funders would pay, likely the level at which they’ll still be saving money by getting an organ instead of paying for long-term dialysis.

Given my earlier posts on “dedicated ventilators,” I think this is a perfectly reasonable way to think about the matter. But I wish to dispute some reasons Volokh gives to believe that “preventing inequality isn’t reason enough to interfere with medical self-defense” . . .

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Hyman’s Inferno

Gustave_Dore_Inferno32.jpgDevilish rhetoric is hot nowadays–ranging from the Chavez diatribe at the U.N. to “apocalypse chic” to the Left Behind series. Now the Cato Institute is getting in on the act, publishing an expanded version of David Hyman’s law review article Medicare Meets Mephistopheles as a book.

The book does a great job clarifying some complex Medicare law–the glossary and primer on Fraud and Abuse Laws alone are worth the purchase price. However, consistency is not a virtue of the book’s Screwtape-inspired narrator. He first suggests that Medicare is problematic because “‘single working mothers in Nebraska (often themselves lacking health insurance) [are] footing the bill for gold-plated health care provided to high-income Medicare enrollees in Miami’” (41). But soon enough, the grand design becomes apparent:

If Medicare were wholly means-tested, it would be instantly transformed into a program for poor seniors, instead of one for the poor, the wealthy, and everyone in between. Once the Medicare program does not include all the elderly, it becomes much easier for legislators to impose significant funding and benefit cuts . . . . (89)

This is a pretty scary vision; as Ezra Klein notes, in Hyman’s ideal world, “those who make poor decisions, or simply get really ill, face financial ruin.”

While Hyman thinks moral hazard drives “gluttonous” overuse of health services, recent scholarship (reported here) is undermining that shibboleth of consumer-directed health reformers. Certainly there are some ways in which cost-controlling measures could save health care dollars. But Hyman and other free marketeers seem to ignore the fact that expenditures on the chronically ill (which are largely nondiscretionary) are driving cost pressures.*

There’s a bonus excerpt from Richard Epstein’s forward to the book after the jump….

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