Category: Health Law

What Would Europe Do?

Muni Wifi Router.jpgI went to a few trying panels at the annual law prof conference, but overall I felt presentations in my fields were great. (Perhaps it’s just like Congress–people hate the institution but love their own representative). My two favorite panels were on the internet & telecommunications, and on health insurance. But I felt the latter was ultimately more satisfying than the former, largely because many of the health scholars were deeply aware of comparative health policy, but the internet/telephony panel focused very tightly on U.S. policies.

That’s not to say the internet/telephony panel was at all bad–many big names in the field were there, they directly argued with one another, and a high-level senate staffer injected some political realism into what could have become a speculative discussion. Perhaps the most compelling arguments for the status quo (as opposed to “net neutrality intervention“) were offered by Christopher Yoo, who put forward a quasi-Gilderian vision of Darwinian competition unleashing quantum advances in communication services. For example, Yoo said it would be foolish for the FCC to protect Google from “gouging” by broadband networks, since the danger of such discrimination might just drive Google to massively invest in a satellite network to provide a third alternative to the the telephone/cable duopoly. Some would say it’s that duopoly that’s largely responsible for the US’s pathetic ranking of 21st in the world (right behind Estonia) in broadband penetration.

That makes a lot of sense as far as it goes, and reminds me generally of Schumpeterian visions of innovation–let monopolies rack up rents so they’ll either use profits to innovate or provoke someone else to swipe their customers. But another, gentler vision animates some European policy on the matter, where most customers get much lower prices for much faster services than Americans do.

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Employer-Based Health Insurance as Social Darwinism

social darwinism.jpgThe NYT has done a great job chronicling the social costs of diabetes this year. A recent article focuses on the ADA struggles caused by the illness. Consider the following situations:

A mortgage loan officer in Oregon was denied permission to eat at her desk to stanch her sugar fluctuations, and eventually was fired. A Sears lingerie saleswoman in Illinois with nerve damage in her leg quit after being told she could not cut through a stockroom to reach her department. A worker at a candy company in Wisconsin was fired after asking where he could dispose of his insulin needles.

Some of these workers have rights under the ADA, but many live in circuits where judges consistently refuse to recognize diabetes as a disability under the Act. The employers sound heartless, but face an unavoidable market logic: when the health cost of diabetics average “five times that of workers without diabetes,” those who can eliminate “bad risks” from their workforce can gain an edge over competitors.

Our unique system of employer-based health insurance promotes Social Darwinism on two levels. First, the chronically ill individuals most in need of health care are the first to be shut out of it. Second, small employers are often the ones most vulnerable to catastrophic consequences of sick workers because they can’t afford to spread risk around (or buy plans that can).

This is one reason why I hope Jacob Hacker’s The Great Risk Shift lives up to its billing as “the essential policy book of the year.” Hacker realizes that there is something deeply wrong with a system that punishes people for being sick. There is little reason to expect some “private” or “charitable” solution to the problem of the uninsured, since nonprofit institutions have been stretched to the limit here and “good employers” that provide insurance will, as often as not, be undercut by more cutthroat competitors.

Much like the debate over net neutrality, the debate over employer-based health insurance will come down to our sense of the nature of fair competition. Hopefully we can all agree that a system that encourages employers to dump the most vulnerable workers is suboptimal.

Photo Credit: Flickr/beigeinside.

The Courtier Society

Just a quick note on an issue I’ve been covering a bit here: the fast-growing “beauty business” of cosmetic surgery. The NYT has a good piece on the topic, reporting that

Five years ago, cosmetic medicine was primarily the domain of plastic surgeons, facial surgeons and dermatologists — medical school graduates who undergo several years of training in facial skin and its underlying anatomy. But now obstetricians, family practitioners and emergency room physicians are gravitating to the beauty business, lured by lucrative cosmetic treatments that require same-day payments because they are not covered by insurance and by a medical practice without bothersome midnight emergency calls.

The new trend toward doctor-courtiers has raised interesting issues for licensing boards; though “all doctors with state medical licenses are allowed to administer all kinds of treatments . . . doctors have not commonly set up shop in fields far outside their expertise.” But that’s becoming common now. The president of the American Board of Medical Specialties criticizes the trend, but we can expect it to grow as the demand for favored appearance grows.

What to do? Well, I’d like to float two suggestions. Medical education is pretty heavily subsidized by the federal government. Perhaps, to the extent doctors opt out of traditional healing fields and take on the vocational equivalent of celebrity hairdressing, some of that subsidy could be “clawed back,” ala extant Medicaid lookback provisions that scrutinize beneficiaries’ spending habits in the years before they apply for benefits. I would only propose this going forward, so as not to upset current doctors’ reliance interests.

Another approach would build on legal challenges to cosmetology regulation. If these cosmetic interventions are really so easy that one can do a weeklong course to understand them, why require the involvement of doctors at all? I know we need to look out for the safety of those who opt for the procedures. But perhaps not at the cost of diverting qualified doctors from the healing arts to utterly frivolous ars amatoria.

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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