Category: Health Care Finance

Who Pays? The Wage-Insurance Trade-off and Corporate Religious Freedom Claims

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By Elizabeth Sepper

Happy new year to all and thanks to the Bill of Health for the opportunity to blog this month!

The first day of 2013 saw yet another ruling in the contraception coverage controversy.  And yet another private corporation—this time a real estate management company owned by the billionaire founder of Domino’s pizza—won a temporary injunction against the mandate on religious freedom grounds.  The company’s claim boils down to this:  the Affordable Care Act forces it to pay, through its insurance plan, for healthcare (in this case contraception) to which it objects as a matter of religion.  Let’s bracket, for the moment, the question of whether an artificial entity can have religious beliefs, let alone a conscience, and ask “what wrong with this argument?”

At heart, it misses a basic fact of health economics:  health insurance, like wages, is compensation that belongs to the employee.  Study after study shows that employers pay in wages whatever they don’t pay in health insurance premiums.  Most recently, a study of Massachusetts’ health reform found that firms offering health insurance pay wages lower by an average of $6,058 (nearly exactly the cost of annual health insurance premiums).  Each employee’s actual “salary” is wages plus the employer share of the health insurance premium.  So, when a corporation purchases a health insurance plan that its employees (and their family members) may or may not use to buy contraception, it is no more paying for contraception than it does when employees use their wages to buy it.

Unfortunately, this basic fact about employer-sponsored insurance is invisible to the public.  Employees are ignorant of the effects of insurance on wages and see insurance as a gesture of goodwill with employers reaping the benefits.  This year for the first time, W-2s must list the total annual premium paid toward health insurance (thanks to the Affordable Care Act).  It’s a first step.  But I suspect that it will do little to change our societal perception of employer-sponsored insurance.  In the litigation over contraceptive coverage, I fear that courts may continue to overlook the fact that insurance (and the healthcare it buys) is paid for by employees, not employers.  If so, the courts will only open the door to future challenges to employees’ healthcare decisions, whether paid for with insurance or wages.

Twitter Round-Up (12/9-12/15)

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By Casey Thomson
This week’s round-up looks at the problems of substandard drug prevalence abroad, NIH’s possible push for an anonymous grant-awarding process, and the Liverpool Care Pathway investigation. Check it out below!
  • Dan Vorhaus (@genomicslawyer) included a link to a report on the recent launch of Personal Genome Launch Canada. The post includes links to help navigate the content and learn more about the intricacies of this project. (12/9)
  • Frank Pasquale (@FrankPasquale) shared a post on the benefits and detriments of raising the age of Medicare eligibility from age 65 to 67 – an idea that has recently gained sway in the political arena. The author ultimately concludes that the move would only be a matter of cost shifting rather than cost saving, and thus harm the disenfranchised 65-66 year-olds that would front the cost. (12/10)
  • Frank Pasquale (@FrankPasquale) also included this article on Dr. Oz’s wrongful diagnosis on organics. While concerns about finances must indeed be taken into consideration when families decide what foods to purchase, families must also be concerned about the presence of pesticides in their food. Organic food, while more expensive, avoids this health hazard. (12/10)
  • Frank Pasquale (@FrankPasquale) additionally linked to this report on the preponderance of substandard (and oftentimes, consequentially lethal) drugs particularly in emerging markets. Efforts to crackdown on substandard drugs have thus far focused largely on counterfeit drugs, rather than those that are the result of “shoddy manufacturing and handling…or deliberate corner cutting,” which constitute an arguably much greater public health threat. (12/10)
  • Daniel Goldberg (@prof_goldberg) shared this post on the prevalence of worthless clinical practice guidelines. The article notes the need to distinguish the guidelines that meet much of the Institute of Medicine (IOM) quality criteria from the rest. (12/10)
  • Alex Smith (@AlexSmithMD) linked to a blog post on advance care planning and the gap between the needs of the healthcare system and those of patients. Currently, much of the paperwork required for advance directives is given without providing families and patients concrete skills needed for both identifying their desires and communicating such desires to direct their own medical care. This article calls for refocusing on providing direct patient empowerment in addition to the existing efforts to improve clinician communication in order to facilitate the ability of advance care planning to reflect the patient’s wishes. (12/11)
  • Michelle Meyer (@MichelleNMeyer) retweeted an article about the NIH’s consideration of introducing anonymity into the grant-awarding process in order to alleviate some of the concerns with bias that have long-plagued the agency. (12/12)
  • Dan Vorhaus (@genomicslawyer) also posted a report on BGI, a world-leading DNA sequencing organization based in China, and their commercial expansion efforts into the healthcare, agriculture, and aquaculture sectors. The question of whether BGI is more a research institute or commercial enterprise comes into question in the article. (12/12)
  • Stephen Latham (@StephenLatham) included a link to his own blog post on the recently renewed controversy concerning the Liverpool Care Pathway for the Dying Patient (LCP), particularly as to whether patients put on the LCP had a discussion with their care providers prior to the decision and whether hospitals were wrongly putting patients on the pathway. The talk of scandal sparked an independent investigation into the LCP; Latham’s article expressed his hope for thoroughness in the investigation and for serious consideration on how to renew the LCP effectively. (12/12)
  • Arthur Caplan (@ArthurCaplan) posted a link concerning the implications of 23andMe, a personalized genomics company, and their launch of the $99 genetic test in the hopes of inspiring greater numbers to get tested. The article’s author reflects on how the real benefit will likely not be immediate for individuals, but will rather depend on the chance that greater data will lead to more breakthroughs in understanding the human genome. (12/14)

Note: As mentioned in previous posts, retweeting should not be considered as an endorsement of or agreement with the content of the original tweet.

Twitter Round-Up (12/2-12/8)

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By Casey Thomson
This week’s Twitter Round-Up features an “American Idol-style” selection of research grant winners, the problems facing children in Syria attempting to be vaccinated, and a review of where we stand with current patient health information privacy and security.
  • Michelle Meyer (@MichelleNMeyer) retweeted an article about a newly emerging landmark case in the United Kingdom. In the suit, a childless couple denied IVF funding due to the woman’s age is suing Health Secretary Jeremy Hunt (because he is “ultimately accountable for healthcare in England”) on the basis of age discrimination. Thought to be the first venture to sue the Health Secretary concerning decisions about this NHS fund rationing, this case also will be the first instance where age discrimination laws have been employed to try for fertility treatment. (12/3)
  • Alex Smith (@AlexSmithMD) shared an article about a problem patients must deal with when approaching post-hospitalization care: Medicare’s offer to pay for hospice care or for a Skilled Nursing Facility (S.N.F.), but only rarely at the same time. Not only does the choice create a financial predicament, but it also has extensive repercussions for the patient’s health. Calls for a combined benefit process between hospice/palliative care and S.N.F. have been made, including a proposed “concurrent care” demonstration project in the Affordable Care Act. (12/6)
  • Dan Vorhaus (@genomicslawyer) linked to a summary of the Ponemon Institute’s Third Annual Benchmark Study on Patient Privacy & Data Security, reporting on the challenges still being faced to safeguard protected health information (“PHI”). (12/6)
  • Michelle Meyer (@MichelleNMeyer) additionally retweeted a link explaining Brigham and Women’s Hospital’s attempt to deal with the rising difficulty of choosing which research grants to support: an “American Idol-style” public online voting. With almost 6,500 votes cast, the public engagement experiment picked a project hoping to research methods for integrating genomic sequencing into newborns’ routine medical care. When future grant holders are struggling to award between a set of equally deserving project proposals, this push for public involvement (after having confirmed scientific rigor) may have intriguing implications. (12/6)
  • Daniel Goldberg (@prof_goldberg) also linked to a study in Denmark testing the relationship between socio-economic status (SES) and blood pressure levels. Despite having a healthcare system that is free and equal-access regardless of factors like SES, the study found that SES had a “significant effect on BP [blood pressure] control” in this survey. (12/7)
  • Arthur Caplan (@ArthurCaplan) posted a report by UNICEF on the efforts by parents in the Syrian Arab Republic to get their children vaccinated. With many medical centers destroyed by the conflict, and with health practitioners having to operate and transport supplies in the dangerous environment, children have been unable to receive routine vaccinations for several months. This campaign aims to provide such vaccinations (specifically for measles and polio) to children, having advertised via churches, mosques, schools, television, and even by SMS to get greater coverage. (12/7)
  • Frank Pasquale (@FrankPasquale) included a book review of Pharmageddon by David Healy, a look at how pharmaceutical companies are excessively influencing the medical industry particularly with “diagnostic categories and clinical guidelines.” The result, according to Healy: a society where people “think about their bodies as a bundle of risks to be managed by drugs,” with a workforce that is “getting ‘sicker,'” and with “major pharmaceutical companies…banking on further overdiagnosis and overtreatment,” all “undermining universal health care.” (12/8)

Note: As mentioned in previous posts, retweeting should not be considered as an endorsement of or agreement with the content of the original tweet.

The New Diagnostic Scan for Alzheimer’s Disease

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[Ed. Note: We’re happy to announce that after a great month of guest blogging, Chris Robertson will be joining Bill of Health as a regular contributor.]

By Christopher Robertson

The New York Times brings us an interesting story about a new brain scan technology that allows the diagnosis of Alzheimer’s Disease.  Below the fold, I sketch a few interesting themes for health law, including the FDA’s authority over the practice of medicine, the use of blinding to improve clinical decision making, the value of a clinical diagnosis for an untreatable condition, and the problems of pre-existing conditions clauses in long-term care insurance. Read More

Another Contraceptives Mandate Case

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Following up on Chris Robertson’s and Kevin Outterson’s posts below (here and here), I just wanted to draw your attention to another federal district court opinion on the contraceptives coverage mandate.  This one is from Nov. 19 and involves the owners of Hobby Lobby.  The court denied their motion for a preliminary injunction on the following grounds:

Plaintiffs have not demonstrated a probability of success on their First Amendment claims. Hobby Lobby and Mardel, secular, for-profit corporations, do not have free exercise rights. The Greens [the individual owners] do have such rights, but are unlikely to prevail as to their constitutional claims because the preventive care coverage regulations they challenge are neutral laws of general applicability which are rationally related to a legitimate governmental objective.

Plaintiffs also have failed to demonstrate a probability of success on their Religious Freedom Restoration Act claims. Hobby Lobby and Mardel are not “persons” for purposes of the RFRA and the Greens have not established that compliance with the preventive care coverage regulations would “substantially burden” their religious exercise, as the term “substantially burdened” is used in the statute. Therefore, plaintiffs have not met their prima facie burden under RFRA and have not demonstrated a probability of success as to their RFRA claims.

There are tens of cases challenging the contraceptives mandate pending at the moment, and several have already been dismissed on procedural grounds.  But my current count of the substantive cases is 3 preliminary injunctions granted (Newland, Weingartz Supply, and Tyndale House Publishers), 1 denied (Hobby Lobby), and 1 case holding outright that the mandate violates neither the First Amendment nor RFRA (O’Brien).  Have I missed any?

Bending the Cost Curve, Not Just Talking About It

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By Nicolas Terry

When the 2012 history of health care is written, which date will have the largest entry, November 5 or 6? Of course, many (but not that many) provisions of the Affordable Care Act will live or die depending on how the election affects control of the White House and Senate. But, November 5 may end up having more significance because that is the date Massachusetts’s new health care spending legislation, here, takes effect.

Signed into law by Governor Patrick on August 6, 2012, the new law now has its own website, here, the promise of a a ton of data, here, and in Brandeis University economist Stuart Altman, here, a chair for its Health Policy Commission (HPC).

Thomas Lee, here, notes “the 349-page law that was just passed in Massachusetts created 25 new boards, task forces, and commissions, and 266 new appointees are going to be enlisted to monitor and enforce compliance with spending caps, oversee provider performance improvement plans, and certify Accountable Care Organizations (ACOs).”

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Event 11/13 – Massachusetts: A Community Approach to Quality, Affordable Health Care

The Petrie-Flom Center Staff Leave a comment

On behalf of our colleagues at Harvard Law School’s Center for Health Law and Policy Innovation, we wanted to let you know about the following event:

Massachusetts: A Community Approach to Quality, Affordable Health Care

Tuesday, November 13th

6 – 7:30pm (food provided)

Wasserstein 1015, Harvard Law School, Cambridge, MA

Six years after passing the groundbreaking health care access law that became the model for national reform, Massachusetts has once again led the nation through legislation setting a limit on the growth of health care cost.  What progress has the state’s health care community made on cost so far, and what will it take to improve quality and meet the new cost growth standards?  Come hear the perspective of Andrew Dreyfus, President and CEO of Blue Cross Blue Shield Massachusetts and leader of the company’s efforts to create one of the largest commercial payment reform initiatives in the nation.

This Week’s Edition of ACA Challenges

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By Nicole Huberfeld

Earlier this week, Jonathan Adler wrote in the National Review Online that challenges to the individual mandate were just beginning.

And today, Oklahoma’s September challenge to the ACA is making headlines.  As I have described before, one of the new theories by which Jonathan Adler and the Cato Institute are seeking to thwart the ACA is by challenging the IRS rule that permits tax subsidies in exchanges created by the federal government, which Cato claims is not supported by the text of the ACA.  (State exchanges are supposedly the only avenue for obtaining tax subsidies for private insurance purchases.)  Oklahoma has brought this challenge to life in federal district court, and Cato’s interest in this and other challenges was apparently reiterated by Professor Adler during a Cato-organized panel on Wednesday. Read More

Congressmen are Concerned that Meaningful Use Stage 2 is Too Weak

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By Leslie P. Francis

On October 4, four Republican Congressman, all with powerful positions concerning health care, wrote Secretary Sebelius urging suspension of “meaningful use” Stage 2 payments until a stronger program is in place. The Congressmen, Dave Camp (Chair of the House Ways & Means Committee), Wally Herger (Chair of the Ways & Means Subcommittee on Health), Fred Upton (Chair of the House Committee on Energy and Commerce), and Joe Pitts (Chair of the Energy & Commerce Subcommittee on Health), expressed concern that the Stage 2 regulations are too weak to insure genuine interoperability of electronic medical records.  As a result, the Congressmen contended, a great deal of taxpayer money will be wasted on payments for electronic records that do little to improve care or reduce costs.

The Congressmen have a point, despite the apparant partisanship of the letter.  There is a history of apparent reluctance on the part of the Office of the National Coordinator for Health Information Technology, and with it HHS, to meet head-on industry complaints about the difficulty and costs of meeting standards or industry contentions that regulation will stifle innovation. Models of technology forcing that were employed in furtherance of environmental protection appear not to have been considered by ONC and HHS. The requirement to meet Meaningful Use Stage 2 was delayed by a year, from 2013 to 2014, to allow vendors more time to develop products. As I indicated in an earlier post, ONC has decided not to develop governance rules for health IT exchanges, out of industry concern for impact on innovation.   The stage 2 meaningful use requirements are not very strong, either, as the Congressmen point out. For example, core requirements are only that 50% of prescriptions be electronic, that only 50% of care referrals must be accompanied by electronic care summaries, that only 50% of patients must have access to health information (with 5% using it), and the EHR be capable of generating only one list of patients by condition. (For a handy comparison of stage 1 and stage 2 certification criteria, see here). All of these–and other–requirements are important to anticipated improvements in care to be garnered from the introduction of EHRs.  For example, generation of lists of patients with a specified condition (e.g. diabetes) may be an important way to ascertain the quality of patient management across a practice. Read More

Quality Control on the Back-End via the ACA and on the Front-End via Tort Litigation

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By Vickie J. Williams

I am back after a brief hiatus for the Jewish holidays. L’Shanah Tova to all my readers who have just celebrated the Jewish New Year.

The first Monday in October is, of course, a special day for all of us legal eagles–the Supreme Court is back in session. The other significant thing about October 1 for those interested in health law is that hospitals will now be fined if too many of their Medicare patients are readmitted within 30 days of discharge due to complications. As reported by the Associated Press, this is part of the Affordable Care Act’s push to incentivize quality improvement while trying to save taxpayers money. Right now, admissions for only three medical conditions are subject to the penalty: heart attacks, heart failure and pneumonia. Penalties are held to a maximum of 1% of the hospital’s Medicare payments for now, but will rise to a maximum of 3% of Medicare payments over several years. This attempt to control quality of care on the back-end constitutes a marked contrast with the way reimbursement policy has worked over the last several decades to discourage hospitals from keeping patients in beds for “social” reasons, such as having nobody to care for them at home if they are discharged. Many Medicare hospital readmissions are due to non-compliant behavior by fragile patients with few resources to help them once they leave the hospital, something that is not really subject to the hospital’s control, and says nothing about the hospital’s quality of care for the patient. For decades, Medicare payment policy, which generally pays hospitals the same amount for caring for a patient regardless of how long he or she is in the hospital, has encouraged speedy discharges. This is touted as a way to save costs. Apparently, the new policy on payments for readmission is an acknowledgement that there is both a financial and a human cost to treating medically and socially fragile people in the express lanes of health care. It remains to be seen whether the penalties result in better quality care, or significant savings, but surely they will result in increased work for hospital social workers and discharge planners. Read More