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References
Complete lists of participants on these and other panels are available infra Appendix A and in the Agenda, at http://www.ftc.gov/ogc/healthcarehearings/completeagenda.pdf.
Robert J. Mills & Shailesh Bhandari, U.S. CENSUS BUREAU, Health Insurance Coverage in the United States: 2002, at 1 (2003), available at http://www.census.gov/prod/2003pubs/p60-223.pdf. For more detail on the uninsured, see infra Chapter 5, Section VIII.
Stephen Heffler et al., Health Spending Projections Through 2013, 2004 Health Affairs (Web Exclusive) W4–79, 83 ex.4, at http://content.healthaffairs.org/cgi/reprint/hlthaff.w4.79v1?ck=nck. Consumer contributions to private health insurance premiums are included in the amount for private health insurance expenditures, not in the amount for consumers’ out-of-pocket payments. Id. at 86.
Id. at 83 ex.4.
Id. at 80 ex.1.
Id. at 87 ex.5.
Id.
McCarran-Ferguson Act, 15 U.S.C. §§ 1012–1014 (1945). The Act was a response to the Supreme Court’s decision in United States v. South-Eastern Underwriters A ss’n, 322 U.S. 533 (1944), in which the Supreme Court held that insurance is commerce, and when transacted across state lines, is interstate commerce and subject to federal law, including the antitrust laws. This opinion reversed the Supreme Court’s decision in Paul v. Virginia, 75 U.S. 168 (1869) and similar cases, in which the Court had held insurance was not commerce within the meaning of the Commerce Clause and was accordingly not subject to federal regulatio n. See South-Eastern Underwriters, 322 U.S. at 543–45.
McCarran-Ferguson Act § 1012; Group Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205, 221, 224 (1979) (“[T]he primary concern of both representatives of the insurance industry and the Congress was that cooperative ratemaking efforts be exempt from the antitrust laws” as long as they were regulated by the state.).
McCarran-Ferguson Act § 1012(b).
Id. §§ 1012(b).
See, e.g., Nat’l Ass’n of Insurance Commissioners (NAIC), Annual Report 1 (2003), at http://www.naic.org/about/docs/03_annual_report.pdf.
McCarran-Ferguson Act § 1013(b). But see American Chiropractic Ass’n, Comments Regarding Health Care and Competition Law and Policy (Sept. 9, 2003) 1 (Public Comment) (arguing certain anticompetitive conduct is protected by the McCarran-Ferguson Act and this puts individual health care providers “at a distinct disadvantage” visa-vis insurers).
McCarran-Ferguson Act § 1013. In a trilogy of cases decided between 1978 and 1982, the Supreme Court clarified that the McCarran-Ferguson Act exempted the business of insurance, not the business of insurance companies. The court “identified three criteria relevant in determining whether a particular practice is part of the ‘business of insurance’ exempted from the antitrust laws by § 2(b): first, whether the practice has the effect of transferring or spreading a policyholder’s risk; second, whether the practice is an integral part of the policy relationship between the insurer and the insured; and third, whether the practice is limited to entities within the insurance industry.” Union Labor Life Ins. C o. v. Pireno, 458 U.S. 119, 129 (1982). See also Royal Drug, 440 U.S. at 221–24, 229–30 n.36 & 37; St. Paul Fire & Marine Ins. Co. v. Barry, 438 U.S. 531, 546, 551 (1978); American Bar Ass’n, Section of Antitrust Law, Comments Regarding The Federal Trade Commission’s Workshop on Health Care and Competition Law and Policy (Oct. 2002) 7–8 (Public Comment).
See, e.g., Karen Pollitz et al., GEORGETOWN UNIV. INSTITUTE FOR HEALTH CARE RESEARCH & POLICY, A Consumer’S Guide to Getting and Keeping Health Insurance in the District of Columbia (2002), available at http://www.healthinsuranceinfo.net/dc.pdf. This website has consumer guides for all 50 states and the District of Columbia.
NAIC, supra note 12, at 1. Many states also have procedures for appealing coverage denials.
Employee Retirement Income Security Act (ERISA) of 1974, 29 U.S.C. § 1001.
See James C. Dechene, Preferred Provider Organizations, inHealth Care Corporate Law: Managed Care § 2.12.7, at 2–50 n.21 (Mark A. Hall & William S. Brewbaker III eds., 1999 & Supp. 1999) (“ERISA requirements include, for example, broad reporting and disclosure requirements (29 U.S.C. §§ 1021 et seq.); participation and vesting requirements (29 U.S.C. §§ 1051 et seq.); funding requirements (29 U.S.C. §§ 1081 et seq.); and fiduciary responsibilities (29 U.S.C. §§ 1101 et seq.).”).
29 U.S.C. § 1144(a), (b)(2)(A), (b)(2)(B ). The “savings clause” allows for state regulation of insurance, and the “deemer” clause prevents employee benefit plans from being deemed to be insurers.
Ky. Ass’n of Health Plans, Inc. v. Miller, 538 U.S. 329, 123 S. Ct. 1471, 1479 (2003) (internal citations omitted).
Health Insurance Portability and Accountability Act (HIPAA) of 1996, Pub. L. No. 104–191, 110 Stat. 1936. See also U.S. Dept. of Labor, Fact Sheet: HIPAA, at http://www.dol.gov/ebsa/newsroom/fshipaa.html (last visited June 23, 2004); U.S. Dep’t of Labor, Frequently Asked Questions About Portability of Health Coverage and HIPAA, at http://www.dol.gov/ebsa/faqs/faq_consumer_hipaa.ht ml (last visited June 23, 2004). HIPAA also contains a number of provisions relating to fraud and abuse enforcement, which are not addressed in this Report.
See supra note 21. See also 29 U.S.C. §§ 1181–1183 (ERISA); 42 U.S.C. §§ 300gg et seq. (Public Health Service Act).
The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1986, Pub. L. No. 99–509, 100 Stat. 187 4. See also Pension & Welfare Benefits Admin., U.S. Dept of Labor, Health Benefits Under the Consolidated Omnibus Budget Reconciliation Act (2001), at http://www.labor.gov/ebsa/pdf/cobra99.pdf.
Pension & Welfare Benefits Admin., supra note 23, at 1–2.
Although there are three categories of mandated benefits, this Report focuses primarily on “provider mandates.” See infra Chapter 6.
Gitterman 6/25 at 8–9 (noting that Idaho has only ten mandated benefits, but Maryland has 52).
The federal Newborns’ and Mothers’ Health Protection Act requires group health plans and insurers that provide benefits for hospital lengths of stay in connection with childbirth to provide coverage for a 48-hour hospital stay following a normal delivery and a 96-hour hospital stay following a cesarean delivery. The Mental Health Parity Act generally requires group health plans and insurers to provide for parity in lifetime and annual dollar limits on mental health benefits with dollar limits on medical and surgical benefits. The Women’s Health and Cancer Rights Act requires plans and insurers to provide coverage for post-mastectomy benefits, including benefits for all stages of reconstruction of the breast on which the mastectomy was performed, surgery and reconstruction to produce a symmetrical appearance, prostheses and treatment of physical complications of the mastectomy, including lymphademas. See infra Chapter 6.
David A. Hyman & Mark Hall, Two Cheers for Employment-Based Health Insurance, 2 Yale J. Health Pol’Y L. & Ethics 23, 25 (2001).
Id. (noting that exclusion from income in a progressive tax system means that subsidy varies with income, with greater subsidies going to those with higher incomes). See alsoOffice of Mgmt. & Budget, Budget of the U.S. Government: Analytical Perspectives, Fiscal Year 2004 (2003) (estimating personal income tax expenditure for health care at $130.2 billion), available at http://www.whitehouse.gov/omb/budget/fy2004/pdf/spec.pdf; John Sheils & Randall Haught, The Cost of Tax-Exempt Health Benefits In 2004, 2004 Health Affairs (Web Exclusive) W4–106, 110 (estimating personal income tax expenditure for health care at $122.1 billion), at http://content.healthaffairs.org/cgi/reprint/hlthaff.w4.106v1.pdf. See also Stuart Butler, A New Policy Framework for Health Care Markets, 23 Health Affairs 22, 23 (Mar./Apr. 2004) (suggested that families receive more than $140 billion in federal and state tax relief “if they hand over the control of health insurance to their employers.”). One panelist also noted the “huge distortions created by the tax system.” Francis 9/30 at 129.
SeeMills & Bhandari, supra note 2, at 1; John Holahan & Marie Wang, Changes In Health Insurance Coverage: 1994–2000, 2002 Health Affairs (Web Exclusive) W162, 163, at http://content.healthaffairs.org/cgi/co ntent/full/hlthaff.w2.162v1/DC1. See also Hyman & Hall, supra note 28, at 26 (stating that approximately 177 million Americans obtain health insurance coverage through their employers); Institute of Medicine (IOM), Coverage Matters: Insurance and Health Care 8 (2001) (noting that in 2000, approximately 66 percent of the population under age 65 receive employment-based health care insurance; most Americans older than 65 years of age receive health care coverage under the Medicare program).
John Holahan & Marie Wang, Changes In Health Insurance Coverage During The Economic Downturn: 2000–2002, 2004 Health Affairs (Web Exclusive) W4–31, 40, at http://content.healthaffairs.org/cgi/reprint/hlthaff.w4.31v1?ck=nck.
Mills & Bhandari, supra note 2, at 7–8 & fig.3; Holahan & Wang, supra note 31, at 39–40 ex.8.
Hyman & Hall, supra note 28, at 26.
See Darling 6/12 at 100–102 (“[A]ll [health] benefits are foregone wages or other benefits paid for by the worker”); Jonathan Gruber, Health Insurance and the Labor Market, in1A Handbook of Health Economics 645, 699 (Anthony J. Culyer & Joseph P. Newhouse eds., 2000) (“[I]ncreases in health insurance costs appear to be fully reflected in worker wages....”).
See Am. Med. Sec. v. Bartlett, 915 F. Supp. 740, 742 (D. Md. 1996), aff’d, 111 F.3d 358 (4th Cir. 1997). See also S. Allen 4/25 at 105–06 (in Arkansas, commercial insurance products are provided by three national plans, two large local plans, and 64 in-state and out-of state third party administrators, as well as self-insured plans providing health coverage to 45 to 50 percent of the covered population).
Commercial insurance companies include both for-profit and no t-for-profit entities. For-profit companies include, among others, Aetna, Cigna, and UnitedHealthCare. Although Blue Cross and Blue Shield Plans traditionally have been nonprofit companies, some have converted, or attempted to convert, to for-profit status in recent years. See, e.g., S. Allen 4/25 at 105–06; Ginsburg 4/23 at 19.
See Alain Enthoven, Employment-Based Health Insurance is Failing: Now What?, 2003 Health Affairs (Web Exclusive) W3–237, 242–43 (stating that paying a fixed percentage of employees’ premiums rewards those that choose the most expensive plan), at http://content.healthaffairs.org/cgi/reprint/hlthaff.w3.237v1.pdf. According to one report, employee contributions in 1996 accounted for approximately 30 percent of total health insurance premiums. Robert Kuttner, The American Health Care System: Employer-Sponsored Health Coverage, 340 New Eng. J. Med. 248, 250 (1999).
For example, the Public Health Service Act (PHSA) and ERISA, as amended by HIPAA, impose certain federal requirements on insurers. See supra notes 21–22 and accompanying text. Employer-sponsored plans must also comply with ERISA, even if they are fully insured.
Am. Med. Sec., 915 F. Supp. at 74 2, 746.
See Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1985); Am. Med. Sec., 915 F. Supp. at 742. See also Greg Kelly, Financing Design / Consumer Information Issues 2 (6/12) [hereinafter G. Kelly (stmt)], at http://www.ftc.gov/ogc/healthcarehearings/docs/030611gregkelly.pdf; G. Kelly 6/12 at 114.
See, e.g., Gingrich 6/12 at 15–16; Holahan & Wang, supra note 31, at 40; Newt Gingrich et al., Saving Lives & Saving Money 84 (2003).
See generally Dechene, supra note 18, § 2.12.7, at 2–52.
Am. Med. Sec., 915 F. Supp. at 742. The agreed upon amount is called the “attachment” point. There are two types of attachment points — specific (or individual) and aggregate. The specific attachment point is the amount above which the insurer must reimburse the employer for eligible claims made by an individual plan participant. The aggregate attachment point is the amount above which the insurer must reimburse the employer for eligible claims made by all plan participants. Id. at 742.
Id. at 742.
See Am. Med. Sec., 111 F.3d at 362. See also Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724 (1985); Dechene, supra note 18, § 2.12.7, at 2–52 n.29. The Supreme Court considered the boundaries of ERISA preemption in four recent cases: Aetna Health In c. v. Davila, 124 S. Ct. 2488 (2004); Kentucky Ass’n of Health Plans, Inc. v. Miller, 538 U.S. 329 (2003); Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355 (2002); Pegram v. Herdrich, 530 U.S. 211 (2000).
Am. Med. Sec., 111 F.3d at 362 (state regulation was designed to force self-insured plans to provide state mandated benefits if the employer was reimbursed for employees’ eligible claims below $10,000 per beneficiary).
Dechene, supra note 18, § 2.12.7, at 2–51 to 2–52 n.28 (citing to Children’s Hosp. v. Whitcomb, 778 F.2d 239 (5th Cir. 1985), Moore v. Provident Life & Accident Ins. Co., 786 F.2d 922 (9th Cir. 1986), Ins. Bd. of Bethlehem Steel Corp. v. Muir, 819 F.2d 408 (3rd Cir. 1987), State Farm Mut. Auto. Ins. Co. v. C.A. Muer Corp., 397 N.W.2d 299 (Mich. Ct. App. 1986)).
See, e.g., Stuart Circle Hosp. Corp. v. Aetna Health Mgmt., 995 F.2d 500 (4th Cir. 1993); Blue Cross & Blue Shield v. St. Mary’s Hosp., Inc., 426 S.E.2d 117 (Va. 1993).
See, e.g., BPS Clinical Lab. v. Blue Cross & Blue Shield, 522 N.W.2d 902 (Mich. Ct. App. 1994). The Supreme Court held that ERISA does not preempt a New York state law that required hospitals to impose varying surcharges on health insurers, including self-insured ERISA plans. N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645 (1995). The Supreme Court did note, however, that a state law that attempted to force ERISA plans to adopt certain benefits might be preempted. Id. at 668. The case does not clarify whether state laws governing TPAs or PPOs are preempted when contracting with ERISA plans. See Dechene, supra note 18, § 2.12.7, at 2–54 to 2–55.
Kentucky Ass’n of Health Plans, Inc. v. Miller, 538 U.S. 329, 123 S. Ct. 1471, 1476 n.1 (2003) (noting that Kentucky’s law was specifically limited to “employee benefit plans ‘not exempt from state regulation by ERISA.’”). For a discussion of any willing provider laws see infra Chapter 6.
See M. Young 6/12 at 91–96; Michael Young, Financing Design/Consumer Information Issues 2–3, 7 (6/12) (slides) [hereinafter M. Young Presentation], at http://www.ftc.gov/ogc/healthcarehearings/docs/030612young.pdf.
M. Young 6/12 at 91–94. The same panelist noted that although some administrative hassles have been eliminated as electronic claims processing becomes more prevalent, electronic databases are not universal and many employees still face administrative difficulties as they navigate the health care system. Id. at 93. Many insurance companies, on which employers rely to set the standards concerning what treatments are covered, also are slow to adopt coverage for alternative treatments. Finally, he noted that the percentage of large employers providing health benefits for retirees appears to be dwindling quickly. Id. at 93–94. See also The Kaiser Family Found., Employer Health Benefits 2003 Annual Survey § 11, at 132 (in 2003, 38 percent of large employers (200 or more employees) offered health benefits to retirees versus 66 percent in 1988; since 1991, the range has fluctuated from a high of 46 percent in 1991 to a low of 35 percent in 2000; in 2003, 10 percent of small employers (less than 200 employees) offered such benefits), available at http://www.kff.org/insurance/ehbs2003-abstract.cfm.
M. Young 6/12 at 92.
M. Young 6/12 at 94–95; M. Young Presentation, supra note 51, at 3 (citing a “Robert Wood Johnson Foundation survey of 800 registered voters, January 2002”).
See, e.g., M. Young 6/12 at 92 (“[A] lot of our clients will have employees whose payroll deduction for health care will be greater than their increase in their salary. And what happens is their take-home pay becomes less”). Darling 6/12 at 101 (“[A]ll [health] benefits are foregone wages or other benefits paid for by the worker”).
See, e.g., M. Young 6/12 at 91, 95; Kaiser Family Found., supra note 52, § 4, at 62 (in 2003, 62 percent of covered workers had more than one health plan option, and this percent has been relatively stable since 1996).
M. Young 6/12 at 91–92; M. Young Presentation, supra note 51, at 2. See also Kaiser Family Found., supra note 52, § 4, at 64 (38 percent of covered workers have just one plan option; 74 percent of large employers offered employees a choice between at least two health plans versus 26 percent of small employers (less than 200 employees) that offered a choice).
Darling 6/12 at 107; M. Young 6/12 at 99.
M. Young 6/12 at 99; M. Young Presentation, supra note 51, at 7 (structure of employment-based health insurance has changed in recent years: less tightly managed HMOs, more cost sharing with employees, more choices of plans; more drastic changes possible in future: consideration of dropping coverage, consideration of consumer-driven health plans).
Darling 6/12 at 107 (“[T]he amount of money they [employers] pay will grow more slowly than the cost of health care will, and therefore the employees and their retirees will be spending a lot more money”).
See, e.g., M. Young 6/12 at 95–96; Gingrich 6/12 at 15–16.
See, e.g., Empowering Health Care Consumers Through Tax Reform (Grace-Marie Arnett ed., 1999); Butler, supra note 29, at 23; Stuart Butler & D avid B. Kendall, Expanding Access and Choice for Health Care Consumers Through Tax Reform, 18 Health Affairs 45, 46 (Nov./Dec. 1999); Sharon Silow-Carroll et al., in Sickness and in Health? The Marriage Between Empoloyers and Health Care (1995); Uwe E. Reinhardt, Employer-Based Health Insurance: A Balance Sheet, 18 Health Affairs 124, 127 (Nov./Dec. 1999). See also Hyman & Hall, supra note 2 8, at 26–27 (“[D]ifficulties with employmentbased insurance stem from the fact that someone other than the ultimate consumer of health care is making most of the decisions about what coverage to purchase and how much to pay”); M. Young Presentation, supra note 51, at 4.
See, e.g., Silow-Carroll et al., supra note 62; Reinhardt, supra note 62, at 127.
M. Young 6/12 at 95–96; G. Kelly 6/12 at 114–16; Gingrich 6/12 at 15–16.
M. Young 6/12 at 99; Darling 6/12 at 107. But see Gingrich 6/12 at 15. In fact, the tax preferences for employment-based coverage likely confers the most significant advantage. See Hyman & Hall, supra note 28, at 25
See M. Young 6/12 at 98; M Young Presentation, supra note 51, at 5. But see Gingrich 6/12 at 15 (“[W]e artificially constrain and raise the cost of insurance for the self-employed, the unemployed, small businesses, and family farms. There is no inherent reason we can’t have a nationwide market based on something like eBay, where people can go online with very little intermediation cost and buy into a national risk pool.... You should individually be able to buy group insurance.”).
M. Young 6/12 at 98; M. Young Presentation, supra note 51, at 10.
M. Young Presentation, supra note 51, at 10.
See Darling 6/12 at 100 (referencing employee surveys). This panelist emphasized the importance employees place on health benefits, stating that some large employers suspended their contributions to employees’ 401(k) plans, but were very modest with decreases in health benefits. She noted that employees went on strike against Hershey Corporation over an increase from 3 percent to 5 percent in employees’ contributions to health coverage. Id. at 101–102. See also Hyman & Hall, supra note 28, at 42–43.
See Greenberg 6/12 at 63.
Id. at 64.
Id. at 64–65 (the investment up-front would render the plans less-costly in the long-run).
Id. at 64–69. See also infra notes 200–209, and accompanying text (discussing consumerdriven health care), and supra Chapter 1 (discussing quality).
Butler, supra note 29, at 23 (suggesting government “expand tax credits and other tax relief for non-employer-sponsored coverage and for consumers’ direct expenditures, preferably in combination with a phased-in ceiling on the tax exclusion”); Scott Harrington & Tom Miller, Perspective: Competitive Markets for Individual Health Insurance, 2002 Health Affairs (Web Exclusive) W 359, 360 (suggesting more comparable tax treatment for all health insurance consumers), at http://content.healthaffairs.org/cgi/reprint/hlthaff.w2.359v1.pdf. See also Gingrich 6/12 at 6–21.
Butler, supra note 29, at 23–24. See infra notes 200–209, and accompanying text, for a discussion of consumer-driven health care.
Alain Enthoven, Market Forces And Efficient Health Care Systems, 23 Health Affairs 25, 25 (Mar./Apr. 2004) (stating that market forces in this context “meet certain fundamental conditions, including that the buyers are (reasonably well) informed, are using their own money (at least at the margin), and face a choice among competing alternative suppliers”).
Id. at 25–26 (suggesting that a fixed dollar amount, rather than a fixed percentage of the premium, as well as allowing employees to share in the savings if they choose a lower-cost health plan, is one way to provide incentives for employees to seek greater value for their money). See also Enthoven, supra note 37, at 242–43; Kelly Hunt et al., Paying More Twice: When Employers Subsidize Higher-Cost Health Plans, 16 Health Affairs 150, 154 (Nov./Dec. 1997) (research findings, although not definitive, suggested that between 1994–1995,’ firms that did not subsidize more expensive health plans had lower price increases or greater price decreases than those that did subsidize’).
Meyer 4/11 at 24–27. See also infra Chapter 7.
Meyer 4/11 at 27–28.
See G. Kelly 6/12 at 118; G. Kelly (stmt), supra note 40, at 3, 5–6.
See G. Kelly 6/12 at 115–16; G. Kelly (stmt), supra note 40, at 3.
G. Kelly 6/12 at 115–18 (“Under [state] guaranteed issue, an individual who becomes ill may apply for private insurance coverage and must be accepted. This is comparable to allowing a person to purchase auto insurance for a car wreck after its happened.”); G. Kelly (stmt), supra note 40, at 5–6.
G. Kelly 6/12 at 118; G. Kelly (stmt), supra note 40, at 5–6. This speaker indicated that guaranteed issue resulted in a minimum monthly premium for family coverage of $1,176 in Portland, Maine, $3,576 in Trenton, New Jersey, and $1,113 in Ithaca, New York. Conversely, in three states without such laws, the monthly premium for comparable family coverage was $355 in Madison, Wisconsin, $410 in Arlington, Virginia, and $461 in Pittsburgh, Pennsylvania. G. Kelly 6/12 at 116–17; G. Kelly (stmt), supra note 40, at 4.
Francis 9/30 at 129–30.
IOM, supra note 30, at 41.
See Harrington & Miller, supra note 74, at 360 (suggesting “[b]roader access to more comparable tax treatment for all health insurance consumers, regardless of where or how they purchase insurance, is needed to provide a deeper, more diversified pool of potential customers and move the individual market beyond a narrow niche role.”).
SeeGreg Scandlen, Defined Contribution Health Insurance 17 (Nat’l Center for Policy Analysis, Policy Backgrounder No. 154, 2000) (stating that expenses are higher because insurance companies use agents to screen individuals for the highest risks, “people in the individual market are older, sicker and poorer than those in the group market... [and that] they are also unsubsidized by either their employers or by the government... [and] lapse rates are high as people acquire coverage when they have the money, and drop it when they run out of funds”). See also G. Kelly (stmt), supra note 40, at 5; Gingrich 6/12 at 15; Harrington & Miller, supra note 74, at 359.
See G. Kelly 6/12 at 115–16; G. Kelly (stmt), supra note 40, at 7 (noting that “the small group market is, on average, much more expensive than the individual market” and small business members paid approximately 25 percent more than individuals for insurance policies available on the Internet); M. Young Presentation, supra note 51, at 10; M. Young 6/12 at 92. Individual policies, however, often do not provide coverage as comprehensive as that available in the group market, and such pricing comparisons may not be based on similar coverage. See alsoScandlen, supra note 87, at 17 (HIPAA requirements and other cost-increasing regulations more prevalent in the small group market).
See, e.g., Karen Pollitz et al., supra note 15, at 12; Agency for Healthcare Research & Quality (AHRQ), Pub. No. 93-0018, Checkup on Health Insurance Choices (Dec. 1992), at http://www.ahrq.gov/consumer/insuranc.htm (last visited June 28, 2004); American Health Insurance Plans (AHIP), Guide to Health Insurance, at http://www.ahip.org/content/default.aspx?bc=41 329 351 (last visited June 28, 2004).
See, e.g., Antos 9/30 at 114 (there is some overlap of coverage for the two programs, resulting in approximately 80 million people being covered by these two programs); Joseph Antos, Can Medicare and Medicaid Promote More Efficient Health Care? 1 (9/30), at http://www.ftc.gov/ogc/healthcarehearings/docs/030930josephantos.pdf.
Hyman 9/30 at 112–13.
42 U.S.C. § 1395 et. seq. See also Centers for Medicare & Medicaid Services (CMS), Medicare Information Resource, at http://www.cms.hhs.gov/medicare (last modified Sept. 12, 2003).
ESRD is chronic, irreversible kidney disease. Patients with ESRD require dialysis, usually 3 times per week, to cleanse the blood of toxins, which, if not removed through dialysis, will kill the patient. There are approximately 400,000 people in the U.S. with ESRD, of whom 300,000 must receive dialysis every other day. Cashia 9/30 at 164; Joseph Cashia, National Renal Alliance: Success Starts with Choosing the Right Partner 9 (9/30) (slides), at http://www.ftc.gov/ogc/healthcarehearings/docs/030930cashia.pdf. Medicare pays for over 70 percent of all dialysis treatments. One speaker testified about several problems with the Medicare ESRD program: Medicare pays dialysis treatment centers only 30 percent of what it paid in 1984 (after accounting for inflation); there is inconsistent state regulatory oversight and credentialing; and there are payment differentials between urban and rural treatment centers. Cashia 9/30 at 167, 169–172.
42 U.S.C. § 1395 et. seq.
42 U.S.C. § 1395c. See also U.S. Dep’t of Health & Human Services (HHS), Medicare & You: 2004 (2004), available at http://www.medicare.gov/publications/pubs/pdf/10050.pdf. Because M edicare is financed on a “pay-asyou-go” basis, the expenses of current beneficiaries are paid with contributions from payroll taxes imposed on those currently working. Individuals who did not pay into Medicare through payroll taxes can participate in P art A by paying a premium.
HHS, supra note 95.
See HHS, Medicare & You: 2004 Id. The premium can be changed annually. The monthly premium is usually taken out of the recipient’s monthly Social Security, Railroad Retirement, or Office of Personnel Management Retirement payment. Other covered services include: ambulatory surgery center facility fees for approved procedures, part-time or intermittent home health care services, certain outpatient medical and mental health therapies, and blood provided as an outpatient or as part of a Part B covered service.
For example, in 2003, Medicare beneficiaries were responsible for the following co sts of hospital and medical care: (1) hospital stays — $840 per day for the first 60 days, $210 per day for days 61–90, and $420 per day for days 91*2-150; (2) skilled nursing facilities — up to $105 per day for days 21–100; (3) blood — cost of the first three pints; (4) Medicare Part B yearly deductible — $100 per year; and (5) Coinsurance and copayments — 20 percent of Medicare-approved amount for most covered services, 50 percent of Medicare-approved amount for outpatient mental health treatment, and copayments for outpatient hospital service s. See generally, U.S. DEP’T OF Health & Human Services (HHS), Choosing A Medigap Policy: A Guide to Health Insurance For People with Medicare, at http://www.medicare.gov/Publications/Pubs/pdf/02110.pdf.
See HHS, supra note 95, § 8, at 63–68 (entitled “Other Insurance and Ways to Pay Health Care Costs”). Some Medicare beneficiaries receive additional health insurance through employer provided retirement programs. By statute, Medicare is a secondary payor to such benefits. See generally, Kaiser Family Found., supra note 52.
See HHS, supra note 99.
Pub. L. No. 108–173, 117 Stat. 2066 (2003). Pursuant to Implementation of Medicare Advantage Program, 42 U.S.C. § 1395w-21, any legislative reference to Medicare + Choice is deemed a reference to Medicare Advantage and MA.
See HHS, supra note 95, § 6, at 43–54 (entitled “Medicare + Choice Plans”).
Pizer 4/23at 146–47; Steven Pizer, Competition in the Medicare+Choice Program 5 (4/23) (slides) [hereinafter Pizer Presentation], at http://www.ftc.gov/ogc/healthcarehearings/docs/pizer.pdf; Steven Pizer & Austin Frakt, Payment Policy and Competition in the Medicare+Choice Program, 24 Health Care Fin. Rev. 83 (Fall 2002).
See HHS, supra note 95, § 6, at 43–54 (entitled “Medicare + Choice Plans”); Pizer 4/23 at 144; Pizer Presentation, supra note 104, at 2; Pizer & Frakt, supra note 104, at 83.
Pizer & Frakt, supra note 104, at 83 & n.1.
Pub. L. No. 108–173.
39 Boards of Trustees of the Federal Hospital Insurance & Federal Supplementary Medical Insurance Trust Funds Ann. Rep. 1-21 (2004) (§ I, Overview) [hereinafter 2004 Medicare Trustees Report], at http://www.cms.hhs.gov/publications/trusteesreport/2004/tr.pdf.
2004 Medicare Trustees Report, supra note 108, at 2 (“The financial status of the fund has deteriorated significantly, with asset exhaustion projected to occur in 2019 under current law compared to 2026 in last year’s report.”).
Social Security & Medicare Trustees, Status of the Social Security and Medicare Programs: A Summary of the 2004 Annual Reports, http://www.ssa.gov/OACT/TRSUM/trsummary.html (last visited July 15, 2004).
Antos 9/30 at 121.
Id. at 122.
Francis 9/30 at 128.
Pizer 4/23 at 147.
Id. at 147.
Id. at 158 (noting that the amount of competition in any given county also affected new entry; i.e., the more competing plans, the less likely entry would occur).
Antos 9/30 at 115.
Id. at 115. See also Crippen 9/30 at 155.
Antos 9/30 at 115, 124.
Id. at 116, 122.
Francis 9/30 at 131.
See, e.g., Antos 9/30 at 116, 121–23; Francis 9/30 at 132–37, 141–42; Lemieux 9/30 at 144, 146–47.
Francis 9/30 at 135–36; Antos 9/30 at 115, 124; Lemieux 9/30 at 147–53.
Francis 9/30 at 135.
Lemieux 9/30 at 145–46, 150; Francis 9/30 at 136–37.
Antos 9/30 at 125–26 (cautioning that short-term low prices are “seductive if you’re looking at big budget deficits,” but could discourage long-term investment and innovation); Lemieux 9/30 at 151. See also infra Chapter 7. But see Centers for Medicare & Medicaid Services, Pub. No. CMS-11054, the Facts about Upcoming New Benefits in Medicare (2004), available at http://www.medicare.gov/Publications/Pubs/pdf/1105 4.pdf (noting that the MMA specifically bars CMS from negotiating drug prices).
Antos 9/30 at 122–23.
Id. at 122–23.
Francis 9/30 at 185–87.
Id. at 128–37, 186–87. See also Antos 9/30 at 121–22; Lemieux 9/30 at 144–47.
42 U.S.C. § 1396 et. seq. See also CMS, supra note 92.
CMS, supra note 92.
SeeCenters for Medicare & Medicaid Services (CMS), Medicaid: A Brief Summary, at http://www.cms.hhs.gov/publications/overviewmedicare-medicaid/default4.asp (last modified Jan. 28, 2004).
See Id. Generally, programs will cover those who meet one of the following criteria: (1) meeting the requirements for the A id to Families with Dependent Children (AFDC) program that were in effect in the state on July 16, 1996; (2) children under age 6 whose family is at or below 133 percent of the Federal poverty level; (3) pregnant women whose family income is below 133 percent of the federal poverty level; (4) Supplemental Security Income (SSI) recipients in most states; (5) recipients of adoption or foster care assistance; (6) certain protected groups who are permitted to keep Medicaid benefits for a limited period of time (e.g., individuals who are disqualified for cash assistance due to worker income from other sources); and (7) all children born after September 30, 1983, under age 19, whose families’ income is at or below the federal poverty level. Id.
See Id. Other Medicaid services may include family planning services and supplies, rural health clinic services, home health care for persons eligible for skilled-nursing service, laboratory and xray services, pediatric and family nurse practitioner services and nurse-midwife services, and early and periodic screening, diagnostic, and treatment services for children under age 21. Id.
John Holahan & Brian Bruen, Medicaid Spending: What Factors Contributed to the Growth between 2000 and 2002? 4 (Kaiser Comm’n on Medicaid & the Uninsured, Issue Paper Pub. No. 4139, 2003), available at http://www.kff.org/medicaid/loader.cfm?url=/commo nspot/security/getfile.cfm&PageID=22135.
Id. at 4.
Id. at 3.
Id. at 2, 8. In 2002, Medicaid paid approximately $92.3 billion (out of $257.6 billion in total spending) for long term care. Id. at 7.
See CMS, supra note 133.
Id. These waivers are authorized by the Social Security Act § 1115.
See Centers for Medicare & Medicaid Services (CMS), Welcome to the State Children’s Health Insurance Program, at http://www.cms.hhs.gov/schip/about-SCHIP.asp (last visited June 23, 2004). See also American Academy of Pediatrics, The State Children’s Health Insurance Program, at http://www.aap.org/advocacy/schipsum.htm (last visited June 23, 2004).
See CMS, supra note 142.
Id. News Release, U.S. Dep’t of H ealth & Human Services (HHS), SCHIP Provided Health Coverage to 5.8 Million Children in 2003 (Feb. 12, 2004) (“The SCHIP law authorized $40 billion in federal funds over 10 years to improve children’s access to health coverage.”), at http://www.hhs.gov/news/press/2004pres/20040212.h tml. SCHIP spending limits for fiscal years 1998 through 2007 are as follows: $4,295 billion for FY 1998; $4,275 billion for FY 1999 through FY 2001; $3,150 billion for FY 2002 through FY 2004; $4,050 billion for FY 2005 through FY 2006; and $5 billion for FY 2007. CM S, supra note 142.
HHS News Release, supra note 144.
See American Academy of Pediatrics, supra note 142.
See CMS, supra note 142; American Academy of Pediatrics, supra note 142.
See CMS, supra note 142.
See Id. See also American Academy of Pediatrics, supra note 142.
See generally U.S. Census Bureau, Types of Health Insurance Coverage, at www.census.gov/hhes/hlthins/hlthinstypes.html (last revised Apr. 21, 2004).
Robert E. Hurley et al., The Puzzling Popularity of the PPO, 23 Health Affairs 56, 58 (Mar./Apr. 2004); Andrew I. Batavia, Preferred Provider Organizations: Antitrust Aspects and Implications for the Hospital Industry, 10 AM. J.L. & MED. 169, 175 (1984). See also Eric R. Wagner, Types of Managed Care Organizations, in Essentials of Managed Health Care 21 (Peter R. Kongstvedt ed., 4th ed. 2003); Dechene, supra note 18, § 2.1, at 2-3 to 2-5; Lerner 4/24 at 96–98 (listing many types of PPOs).
Hurley et al., supra note 151, at 58.
Sherman Folland et al., The Economics of Health and Health Care 256 (2004); Stephen A. Norton & Stephen A. Zuckerman, Reimbursement for Physician Services, inIntegrating He Practice of Medicine 78 (Ronald B. Connors ed., 1997) (“A recent study of 30 PPO plans indicates that the predominant payment method for PPO providers was discounted FFS and that none of the PPOs surveyed used capitation as a basic form of physician reimbursement.”). Providers who contract for inclusion in a PPO include IPAs, medical groups, individual physicians, hospitals, and other necessary facilities.
For a discussion of physician network joint ventures, see supra Chapter 2.
Norton & Zuckerman, supra note 153, at 78.
Donald Crane, Statement 4 (5/7), at http://www.ftc.gov/ogc/healthcarehearings/docs/030507doncrane.pdf. See also S. Allen 4/25 at 105 (in Arkansas, BCBS has 71 percent of its business in PPOs).
See Wu 4/23 at 128 (stating that it is hard to find accurate data on PPO enrollment because PPOs “lack many of the reporting and operating standards that [apply to] HMOs.”); Timothy Lake, Literature Synthesis: How Health Plans Select and Pay Health Care Providers in their Managed Care Networks 14–15, inTimothy Lake et al., Medicare Payment Advisory Comm’n, MPR No. 8568-700, Health Plans’ Selection and Payment of Health Care Providers, 1999 app.C (2000) (final report) (“Analysis of PPO networks are made even more complex by the prevalent practice of renting rather than owning networks, as well as the existence of national and local independent PPOs that rent out each other’s services.”).
Dechene, supra William S. Brewbaker III eds., 1999 & Supp. 1999) note 18, § 2.1, at 2–3, § 2.2, at 2–5 (“Many [PPOs] were formed as a defensive alternative to the growth of HMOs. The initial physician-sponsored PPOs provided a vehicle by which physicians could continue to practice traditional fee-for-service medicine in a structure that could compete with other managed care organizations.”); Desmarais 2/27 at 167; Kanwit 4/25 at 54–55.
Norton & Zuckerman, supra note 153, at 78.
Diana Verrilli & Stephen Zuckerman, Preferred Provider Organizations and Physician Fees, 17 Health Care Fin. Rev. 3 (1996).
Dechene, supra William S. Brewbaker III eds., 1999 & Supp. 1999) note 18, § 2.4.2.4, at 2–13. PPOs turn to external benchmarks such as the Medicare fee schedule because “[m]any providers have marked up their list prices [in recent years] so that the discounted prices do not represent much reduction at all.” Id. at § 2.1, at 2–3.
SeeFolland et al., supra note 153, at 257 (“[T]he provider may enjoy a large increase in patient care business by joining the network.”); Norton & Zuckerman, supra note 153, at 78. Physicians also may agree to contracts with discounted fees to avoid losing patients.
Folland et al., supra note 153, at 257; Wagner, supra note 151, at 21.
See Crane 5/7 at 36; Feder 2/27 at 223.
Each PPO has its own administrative and utilization requirements, and physicians must comply with all of the requirements to be paid. Edward B. Hirshfeld & Gail H. Thomanson, Medical Necessity Determinations: The Need for a New Legal Structure, 6 Health Matrix 3, 32–33 (1996); Casalino 9/25 at 16 (stating that it is difficult for physicians in solo or small group practice who contract with multiple HMOs to comply with each HMO’s utilization management process).
Batavia, supra note 151, at 175–76; Dechene, supra note 18, § 2.4.2.4, at 2–13 (“While a discounted-fee schedule can be an important cost containment tool, it may be less effective than other payment mechanisms, especially capitation, used by HMOs.”); Burgess 4/9 at 107–108 (stating that FFS creates incentives to overprovide health care services).
Crane 5/7 at 38 (observing that PPO “enrollees are allowed to directly refer to specialists. And, so, you can’t have precisely the same utilization controls.”).
Peter R. Kongstvedt, Compensation of Primary Care Physicians, in Essentials of Managed Health Care, supra note 151, at 85, 92 (discussing credentialing) [hereinafter Kongstvedt, Compensation]; Peter R. Kongstvedt et al., Using Data and Provider Profiling in Medical Management, in Essentials of Managed Health Care supra note 151, at 379.
See Buxton 5/8 at 99 (stating that Blue Cross and other payors are working on the use of tiered fees for physicians to encourage higher quality outcomes and also stating that such incentives are “the wave of the future.”); Kongstvedt, Compensation, supra note 168, at 137; Burgess 4/9 at 107–108 (noting some economists argue that a mix of FFS and capitation helps balance incentives to under and over-use health care services). For further discussion of P4P programs, see supra Chapters 1 and 3.
See Marren 5/8 at 79–80; Weis 5/8 at 74; Hurley et al., supra note 151, at 65–67.
See Hurley et al., supra note 151, at 65; but see Dechene, supra note 18, § 2.4.2.3, at 2–12 (contending that provider-initiated PPOs may have greater access to performance related data).
Mills & Bhandari, supra note 2 at 1, 4. This figure is the Census Bureau’s estimate of the number of Americans who are without health insurance at some point during the year. This estimated figure varies significantly, however, depending on the time period employed and the survey data that is used. See Myths about the Uninsured: Hearing on the Uninsured Before the Health Subcomm., House Comm. On Ways and Means, 108th Cong. (2004) (Statement of Len M. Nichols, Vice President, Center for Studying Health System Change) [hereinafter Nichols Statement], at http://waysandmeans.house.gov/hearings.asp?formmode=view&id=1226; IOM, supra note 30, at 3 (“Estimates of the number of persons who lack insurance vary depending on the survey.... Surveys differ in their size and sampling methods, the ways in which questions are asked about insurance coverage, and the period over which insurance coverage or uninsurance is measured.”).
Uwe E. Reinhardt, Is There Hope for the Uninsured?, 2003 Health Affairs (Web Exclusive) W3-376, 378–79 (“Not all ‘uninsured’ people, for example, represent a social problem in the sense that they are helpless victims of circumstance and require help from other members of society.”), at http://content.healthaffairs.org/cgi/reprint/hlthaff.w3.376v1.pdf. See also Pauly 2/26 at 88 (“One fact is there are a lot of low-income people who have a lot better things to do with their money than spend it on health insurance, and... [t]here are a lot of people who don’t value insurance as much as it costs. So, they don’t buy it for various reasons.”).
SeeInstitute of Medicine, Hidden Costs, Value Lost: Uninsurance in America 43 (2003) (“Food, shelter, transportation, and clothing account for 85 percent on average of the expenditures of families living without health insurance.”).
Mills & Bhandari, supra note 2; See alsoCongressional Budget Office (CBO), How Many People Lack Health Insurance and for How Long? 2 (2003), available at ftp://ftp.cbo.gov/42xx/doc4210/05-12-Uninsured.pdf.
Mills & Bhandari, supra note 2, at 2 tbl.1, 6 fig.2, 7. Another way to look at the characteristics of the uninsured is as a percentage of the federal poverty level: 45 percent of the uninsured are within 100 to 300 percent of the federal poverty level, 36 percent are less than 100 percent of the federal poverty level, and 19 percent have incomes above 300 percent of the poverty level. In 2001, a family income of three hundred percent of poverty was $42,384. Reinhardt, supra note 173, at 379–80. Cf. John Holahan et al., The New Middle-Class of Uninsured Americans — Is it Real? 2 (Kaiser Comm’n on Medicaid & the Uninsured, Issue Paper Pub. No. 4090, 2003).
Pamela Farley Short & Deborah R. Graefe, Battery-Powered Health Insurance? Stability in Coverage of the Uninsured, 22 Health Affairs 244, 247–48 (Nov./Dec. 2003); CBO, supra note 175, at viii fig.S2, 9 tbl.3.
Short & Grafe, supra note 177, at 247.
See IOM, supra note 30; Institute of Medicine, Care Without Coverage: Too Little, Too Late (2002) [hereinafter IOM, Without Coverage]; Institute of Medicine, Health Insurance is a Family Matter (2002) [hereinafter IOM, Family Matter]. The IOM reports consolidate and critically appraise the evidence and research regarding the impact of uninsurance on individuals and communities.
American College of Physicians, No Health Insurance? It’s Enough to Make You Sick: List of References and Abstracts 4–5 (1999), at http://www.acponline.org/uninsured/lack-refs.p df (citing, e.g., Marc L. Berk et al., Ability to obtain health care: recent estimates from the Robert Wood Johnson Foundation National Access to Care Survey, 14 Health Affairs 139 (Fall 1995); Andrew B. Bindman et al., Preventable Hospitalizations and Access to Care, 274 JAMA 305 (1995); B. Bloom et al., Access to Health Care Part 2: Working-Age Adults (Nat’l Ctr. for Health Statistics, Vital Health Stat. Series 10, No. 197, Dep’t of Health & Human Services Pub. No. (PHS) 97-1525, 1997); Helen R. Burstin et al., The Effect of Change of Health Insurance on Access to Care, 35 Inquiry 389 (1998–99); John A. Ayanian et al., Unmet Health Needs of Uninsured Adults in the United States, 284 JAMA 2061 (2000)).
See Jack Hadley & John Holahan, How Much Medical Care Do The Uninsured Use, And Who Pays For It?, 2003 Health Affairs (Web Exclusive) W3-66, 70, at http://content.healthaffairs.org/cgi/reprint/hlthaff.w3.66v1.pdf. The article notes that some of the difference is attributable to differences in age and health status between the insured and uninsured, but “research that takes these factors into account still finds about a 50 percent differential.” Id. at 70.
For example, the uninsured have worse medical outcomes and higher in-hospital mortality. See Jack Hadley, The Kaiser Comm’n on Medicare & The Uninsured, Sicker and Poorer: The Consequences of Being Uninsured 4, fig.7 (2002) (finding that research published in the past 25 years suggests that having health insurance reduces mortality rates by 10 to 15 percent), at http://www.kff.org/uninsured/upload/13970_1.pdf; IOM, Without Coverage, supra note 179, at 4–5; IOM, supra note 174, at 3 (“The relative mortality rate for the insured and uninsured reflect a 25 percent higher mortality rate within the uninsured population.”); Colleen Berry & Julie Donohue, The Uninsured in the U.S.: An Issue Brief, 1 Harvard Health Pol’y Rev. (Fall 2000), available at http://hcs.harvard.edu/~epihc/currentissue/fall2000/barry.html; John Billings et al., Recent Findings on Preventable Hospitalizations, 15 Health Affairs 239 (Fall 1996); A.B. Bindman et al., Preventable Hospitalizations and Access to Health Care, 274 JAMA 305 (1995); P.D. Sorlie et al., Mortality in the Uninsured Compared with that in Persons with Public and Private Health Insurance, 154 Arch. Intern. Med. 2409 (1994).
Helen Levy & David Meltzer, What Do We Really Know about Whether Health Insurance Affects Health? 33 (Economic Research Initiative on the Uninsured, Working Paper No. 6, 2001), reprinted inHealth Policy and the Uninsured (Catherine McLaughlin ed. 2004), available at http://www.umich.edu/~eriu/pdf/wp6.pdf.
Levy & Meltzer, supra note 183, at 34. See also Economic Research Initiative on the Uninsured, Research Highlight No. 2, Q&A with David Meltzer, M.D., Ph.D. (Mar. 2003), at http://www.umich.edu/~eriu/qa-meltzer.html; Nichols Statement, supra note 172, at 4 (“What has not been proved by this standard is that universal coverage would improve the health of all of the uninsured.”).
Levy 9/26 at 39 (noting that when the uninsured do seek treatment, “acuity is greater and treatment is more complicated.”)
Robert M. Williams, The Costs of Visits to Emergency Departments, 334 New Eng. J. Med. 642 (1996).
IOM, supra note 30, at 5. See also Milstein 5/29 at 272; Fraser 5/29 at 273 (discussing differences in hospital charges for the insured and uninsured as rack rates versus negotiated prices).
The Office of the Inspector General, Hospital Discounts Offered to Patients Who Cannot Afford to Pay Their Hospital Bills (Feb. 2, 2004), at http://oig.hhs.gov/fraud/docs/alertsandbulletins/2004/FA021904hospitaldiscounts.pdf; Centers for Medicare & Medicaid Services, Questions On Charges For The Uninsured (Feb. 17, 2004), at http://www.cms.hhs.gov/FAQ_Uninsured.pdf. See also News Release, U.S. Dep’t of Health & Human Services, Text of Letter from Tommy G. Thompson Secretary of Health and Human Services to Richard J. Davidson President, American Hospital Association (Feb. 19, 2004) (responding to letter inquiry from hospital association indicating that hospitals have been billing uninsured patients full charges, instead of offering discounts), at http://www.hhs.gov/news/press/2004pres/20040219.html.
James Smith, Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status, 13 J. Econ. Persp. 145, 154 tbl.3 (1999). The study found no statistically significant difference in the wealth effects of the illness on the insured and uninsured. Id. Similarly, another study found non-statistically significant differences in the wealth impact on the insured and uninsured of being diagnosed with a serious illness (cancer, diabetes, heart attack, chronic lung disease, and stroke). See Helen Levy, The Economic Consequences of Being Uninsured (Economic Research Initiative on the Uninsured, Working Paper No. 12, 2002), available at http://www.umich.edu/~eriu/pdf/wp12.pdf.
Mills & Bhandari, supra note 2, at 9–10, tbl.4.
See, e.g., M. Ryan 3/26 at 32 (“[W]ith a high incidence of uninsured patients, we can find that we have a high incidence of patients who become inpatients for whom there is little or no reimbursement. It creates a substantial drain on the hospital resources. Yet, there is no way that we can avoid those responsibilities and so we provide care.”). This obligation is imposed by the Emergency Medical Treatment and Active Labor Act. See supra Chapter 1.
See David A. Hyman, Hospital Conversions: Fact, Fan tasy, and Regulatory Follies, 23 J. Corp. L. 741, 758–60 (1998). Many people believe that nonprofit hospitals obtain a tax exemption because they provide charity care to the uninsured. In fact, in most states, nonprofit hospitals are not required to provide a specific amount of charity care to receive a tax exemption. See id; Kevin M. Wood, Legislatively-Mandated Charity Care for Nonprofit Hospitals: Does Government Intervention Make any Difference?, 20 Rev. Litig. 709 (2001); David A. Hyman, The Conundrum of Charitability: Reassessing Tax Exemption for Hospitals, 16 Am. J.L.& Med. 327, 332 (1990) (“A widely shared (but incorrect) position is that charitable equals charity.”) Several class action lawsuits were recently filed against a large number of nonprofit hospitals, alleging that they “have disto rted the extent of their charity care while using punishing tactics to o btain payments from uninsured patients.” See Holbrook Mohr, Suit Alleges Lack of Charity at Nonprofit Hospitals, Wash. Post, June 18, 2004, at E03.
American College of Physicians, supra note 180, at 1. See also Hadley & Holahan, supra note 181, at 79 n.1 (“’Uncompensated care’ is defined as medical care the uninsured receive but do not pay for fully themselves. It includes reduced-fee care; charity care, for which the uninsured do not pay anything; and bad debts incurred by the uninsured.”).
Hadley & Holahan, supra note 181, at 78.
Id. at 69 ex.2; IOM, supra note 174, at 5 tbl.ES1.
Hadley & Holahan, supra note 181, at 70–71.
IOM, supra note 174, at 55–58.
See William M. Sage et al., Why Competition Law Matters to Health Care Quality, 22 Health Affairs 31, 35–36 (Mar./Apr. 2003).
See Pauly 2/26 at 87 (“What competition alone can never do, it can’t get all or even most of the uninsured insured.”).
Gingrich 6/12 at 9.
Id. at 10–13.
Id. at 12–13. Speaker Gingrich noted that consumer choice also implies individual responsibility and accountability.
See Lansky 6/12 at 70–72; David Lansky, A person-centered view of consumer information in the health care marketplace (6/12) (slides) [hereinafter Lansky P resentation], at http://www.ftc.gov/ogc/healthcarehearings/docs/030612lansky.pdf; Comstock 6/12 at 111–13; Darling 6/12 at 103–04.
See Lansky 6/12 at 70–89 (reporting on findings from studies and surveys conducted by the Foundation for Accountability (FACCT)); Lansky Presentation, supra note 203, at 4–16; Comstock 6/12 at 110–11; Gingrich 6/12 at 51–52 (“Everybody ought to have an electronic health record. It ought to be compatible across all the systems. All the major providers of these kind of systems should be part of an open systems architecture....”).
Lansky 6/12 at 87–88; Gingrich 6/12 at 56–60; Lansky Presentation, supra note 203, at 17–24. See also Antos 9/30 at 117–121 (noting that CMS has an enormous and potentially useful database of information, and although patient and provider privacy issues are important and need to be protected, CMS makes it extremely difficult for researchers, including consumer or business groups, to access it).
Newt Gingrich et al., Saving Lives & Saving Money 85 (2003). As of January 1, 2004, employees may contribute to health savings accounts that can earn tax free interest and be rolled over from year to year. The accounts, however, are only permitted in conjunction with eligible health insurance plans. Eligible plans must have an annual deductible of at least $1,000 for an individual and at least $2,000 for a family, but the sum of the annual deductible and the other annual out-of-pocket expenses (other than premiums) cannot exceed $5,000 for an individual or $10,000 for a family. See MMA § 1201; Health Savings Account, Health Savings Account Learning Center, at http://www.ehealthinsurance.com/ehi/Welcome.ds (last visited July 15, 2004).
See Dwight McNeill, Do Consumer-Directed Health Benefits Favor The Young And Healthy?, 23 Health Affairs 186, 186, 191 (Jan./Feb. 2004) (noting that “[t]he espoused active ingredient of consumer-directed benefits is increased financial exposure to medical expenses to motivate consumers to be more prudent purchasers as they make price-sensitive choices” but that current limitations on such issues as investment and portability may limit their effectiveness); Jon R. Gabel et al., Consumer-Driven Health Plans: Are They More Than Talk Now?, 2002 Health Affairs (Web Exclusive) W395, 396 (“At its heart, the consumer-driven health care movement seeks to combine incentives with information to enable consumers to make informed choices about non-life-threatening health care.”), at http://content.healthaffairs.org/cgi/reprint/hlthaff.w2.395v1.pdf; G. Kelly 6/12 at 36 (noting that “what is going to be important going forward is for the consumer to have value, which is the equation of both price and quality.... [W]hen you spend your own money, you do it wisely... I know, since it’s money out of my own pocket, what is the best mixture of both price and quality. I’m not going to buy the most expensive thing out there, but at the same time I’m going to get the best deal for my money.”).
Comstock 6/12 at 108–10; Lansky 6/12 at 70–71, 73–79 (providing three examples (one personal, two based on his organization’s focus group studies) of how consumers take control or express the desire for more control by having access to more information); Lansky Presentation, supra note 203, at 3, 5–21; National Women’s Law Center, Comments Regarding Health Care and Competition Law and Policy (Nov. 25, 2003) 8 (Public Comment) (noting importance of consumer information, especially in connection with women’s reproductive health services, including treatment options); Shoptaw 4/11 at 59 (suggesting there will be a shift toward new consumer-directed health care, including defined contribution and medical savings accounts); but see M. Young 6/12 at 97–98 (noting that “many employers will embrace consumer-driven plans.... not because they philosophically believe it’s the right thing, but quite frankly because they have no other options and they are desperate”).
See Comstock 6/12 at 108, 111–13. See also Jon R. Gabel et al., Employers’ Contradictory Views About Consumer-Driven Health Care: Results from a National Survey, 2004 Health Affairs (Web Exclusive) W4-210, 214, 217 & 218 n.13 (noting the first evaluations of employers’ views about consumerdriven health care’s impact are ambiguous), at http://content.healthaffairs.org/cgi/content/full/hlthaff.w4.210v1/DC1; Mark A. Hall, Making Medical Spending Decisions: The Law, Ethics and Economics of Rationing Mechanisms (1996).
See Lemieux 9/30 at 145–146; Francis 9/30 at 177, 180.
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(2005). Industry Snapshot: Insurance and Other Third Party Payment Programs. In: Hyman, D. (eds) Improving Healthcare. Developments in Health Economics and Public Policy, vol 9. Springer, Boston, MA. https://doi.org/10.1007/0-387-25752-7_6
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