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

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.

Is Health Law the Problem Underlying the Physician Shortage?

By Christopher Robertson

This week, the New York Times Sunday Review has an editorial arguing that the shortage of primary care physicians could be reduced if we drew more heavily upon other professions, including pharmacists and nurse practitioners, who may be able to provide care more efficiently.  The Affordable Care Act’s efforts to increase insurance coverage and eliminate cost-sharing for preventative care, will only exacerbate the shortage of primary care physicians.  More to the point, the editorial alleges that various state and federal laws create barriers to the sort of integration of healthcare professionals to address the shortage.

Those “scope of practice” laws were enacted to either protect consumers from incompetent healthcare or protect physicians from competition in the healthcare marketplace, or likely some mixture of both.  We know where mainstream physicians stand anyway.  In the words of the American Medical Association’s own newsletter,  “physicians [have] fought a blitz of scope-of-practice expansions by other health professionals on legislative, legal and regulatory fronts.”

The shortage of physicians is also a product of the number of young doctors that our medical schools are producing.  Although several new schools have launched in recent years, others are have actually shrunk due to budget cuts.

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

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.

Dreams Deferred

By Wendy Parmet

After the November election, President Obama’s executive order implementing parts of the so-called “Dream Act” was widely credited with shoring up his support within the Latino community.  Less often noted was his Administration’s decision to exclude the “Dreamers” from the benefits afforded by the Affordable Care Act.

Last August, the Center for Medicare Services (CMS) issued an interim final regulation stating that individuals who benefitted from the President’s program, more formally known as “Deferred Action for Childhood Arrivals” or DACA, would not be considered “lawfully present” for purposes of eligibility to health benefits established by the Affordable Care Act, including the Pre-Existing Condition Insurance Plan and the subsidies and credits that will be available in 2014 to purchase insurance through the health insurance exchanges. Pre-Existing Condition Insurance Plan Program, 77 Fed. Reg. 52614-01 (Aug. 30, 2012) (to be codified 45 C.F.R. § 152.2), http://www.gpo.gov/fdsys/pkg/FR-2012-08-30/html/2012-21519.htm.

The impact of this little noticed determination is quite significant. Although most of the estimated 1.7 million DACA immigrants are healthy, because of their age (under 30), many lack access to employer-provided health insurance. Moreover, if as expected, employers begin to shift their health insurance programs to the ACA-created exchanges, DACA immigrants may find themselves barred from employer-provided plans, even though under the President’s executive order they have a legal right to work in the United States.

The insurance gap created by CMS’ determination that the DACA immigrants are not “lawfully present” in the U.S., a decision that is inconsistent with the Administration’s conclusion that other deferred action recipients are eligible for benefits established under the ACA, illuminates the critical relationship between immigration policy and health policy.  To a surprising degree, the health insurance access problem in the U.S. results from laws that bar immigrants (including many with Green Cards) from many government-supported health insurance programs, including Medicaid. In 2010, over 45 % of non-citizens were uninsured, as compared to less than 14 % of native-born Americans. Approximately 65 % of undocumented immigrants are believed to lack health insurance. The ACA is unlikely to reduce those rates, especially regarding undocumented immigrants. Neither, it is now seems, is DACA.

Study Reveals Complexities of Disclosing and Compensating for Medical Mistakes

[Editor’s Note, I am guest posting this on behalf of my wonderful colleague Michelle Mello, at the Harvard School of Public Health]

Gridlock in many state legislatures over proposals to reform medical liability by capping noneconomic damages—and growing recognition that caps have only modest success in addressing the problems with the malpractice system—have led  health care providers and other stakeholders across the country to think hard about alternative approaches.  Alternatives that don’t require the passage of legislation are especially appealing.  Attention has focused in the last couple of years on a promising approach pioneered by a handful of hospital systems, including the University of Michigan Health System: “disclosure-and-resolution” programs, or DRPs.  In DRPs, healthcare facilities and their malpractice insurers disclose unanticipated care outcomes to patients and their families; investigate and explain what caused them; apologize; and, where appropriate, offer compensation without waiting for the patient to sue.

Early adopters of this approach report remarkable success in reducing liability costs and believe they have markedly improved patients’ experience following a medical injury.  But they can’t tell how much of the benefit is attributable to disclosing errors and apologizing, versus offering compensation.  Is it the honesty and empathy, or the money, that matters?  And if it’s the money, how much is enough to get the outcomes healthcare providers want: reduced frequency of malpractice claims, lower defense and indemnity costs, quicker disposition, improvements in staff reporting of unanticipated care outcomes, and a clinical culture that supports open communication with patients?

A new study that I published with my colleagues, Lindsey Murtagh, Penny Andrew, and Tom Gallagher, in Health Affairs this week begins to answer these questions.  We used an experimental survey design to investigate the relative effects of disclosure, explanation, and apology on the one hand, and different kinds of compensation offers on the other, on people’s responses to learning that they were the victim of a medical error.  We fielded an online survey in which 2,112 American adults randomly received one of 16 vignettes in which they were informed of a medical error.  In all vignettes, a physician and administrator explained how the error occurred, took full responsibility, and apologized.  Some vignettes also included an offer of compensation—either waiver of medical bills, limited reimbursement of out-of-pocket expenses, or full compensation—while others included no compensation offer.  Respondents answered several questions about how they would react to the disclosure.  The survey sample was drawn from KnowledgePanel, a standing, probability-based panel of U.S. adults maintained by GfK (formerly Knowledge Networks).  The survey response rate was 65%.

What did we find?

Read More

Twitter Round-Up (11/25-12/1)

By Casey Thomson

From policy adoption at the federal level to debate over the health concerns of political figures, this week’s round-up focuses largely on the news for bioethics and health law in the realm of politics.

  • Dan Vorhaus (@genomicslawyer) posted a feature on the history of gene patent litigation and implications for next-generation sequencing technologies. (11/26)  He also included a link summarizing key information on H.R.6118, newly passed in the House and Senate and now being presented to the President. Otherwise known as the Taking Essential Steps for Testing (TEST) Act 2012, the bill gives the Centers for Medicare and Medicaid Services (CMS) “greater flexibility in enforcing CLIA [Clinical Laboratory Improvement Amendments] proficiency testing violations” (as noted by Vorhaus). (11/26)
  • Daniel Goldberg (@prof_goldberg) included a post on the inequality in self-rated health as considered by gender. The study, done in Spain, found that females’ lower sense of self-rated health is a reflection of the higher burden of disease in women, and encouraged systems of health to reconsider the approach towards afflictions with lesser impact on mortality that are possibly receiving less attention than is deserved. (11/26)
  • Daniel Goldberg (@prof_goldberg) additionally included a report on the problems parents with disabilities are facing in terms of retaining (or even gaining) their right to be a parent. Such bias against parents, the article notes, may not recognize that ensuring essential support may be all that is needed to discourage problems or eradicate risks for the majority of cases. (11/26)
  • Frank Pasquale (@FrankPasquale) linked to a blog post on the recent protests by AIDS activists in the office of House Speaker John Boehner. The protesters, stripped naked in order to reveal the painted “AIDS Cuts Kill” written on their chests, were there to protest the possible cuts to HIV/AIDS program funding that may follow a fiscal cliff deal.  (11/28)
  • Arthur Caplan (@ArthurCaplan) featured his talk with Boston Public Radio on the fine line politicians must walk when balancing their struggle with a health crisis along with the responsibilities of being a public official. The recent health concerns facing Boston’s Mayor Thomas Menino served as inspiration for this discussion. (11/28)
  • Frank Pasquale (@FrankPasquale) added a news article detailing the recent speech made by principal deputy national coordinator David Muntz of HHS’ Office of the National Coordinator for Health Information Technology. Muntz, in addition to discussing the need to better incorporate technology for fostering stronger communication between patient and doctor, mentioned some striking statistics: “only 15% of patients have renewed a prescription online,” while “just 10% have a personal health record.” (11/29)
  • Arthur Caplan (@ArthurCaplan) posted a link to a new feature on concierge medicine, where appointments can be paid for solely through cash and not through insurance. While previously considered an option only for the rich, concierge medicine has possible implications for the greater body of patients: as the article noted, it may become a more viable option especially as threats of regulation and backlash in a doctor shortage encourage traditionally high-priced firms to backtrack. (11/29)
  • Arthur Caplan (@ArthurCaplan) also shared a video by Canadian comedian Rick Mercer on getting flu shots. (12/1)

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 Readmission Penalty Begins to Bite

By Nicolas Terry

As is well known ACA § 3025 (§1886(q) Social Security Act) established the Hospital Readmissions Reduction program. This is operationalized through deductions built into the Hospital IPPS (Inpatient Prospective Payment Systems) Rule which sets the Medicare reimbursement amounts, here. The excess readmissions ratio initially only applies to readmissions based on MI, Heart Failure, and Pneumonia. Initially the maximum deduction is 1% but that rises to 2% in October 2013 and 3% in October 2015.

A parallel program for Medicaid designed to reduce hospital-acquired infections was introduced in the 2005 Deficit Reduction Act, here. However, Lee and colleagues, here, found no change in infection rates. Nevertheless, the dollars associated with readmissions reduction may give that program greater traction.

Jordan Rau in the New York Times, here, notes that 307 hospitals are already facing the maximum reduction involving many millions of dollars. Not surprisingly some hospitals view the penalties as a distraction while others blame their patients for everything from their level of sickness and poverty to non-compliance. Overall, however, Rau’s article and Amy Boutwell’s recent post at Health Affairs, here, suggest that CMS is succeeding in getting the industry’s attention.

The New Diagnostic Scan for Alzheimer’s Disease

[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

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?

More religious objections to contraception coverage

I wrote last week (at TIE) that corporations might have First Amendment or RFRA religious rights to object to contraception coverage. Now we have a second federal judge agreeing, this time on behalf of Tyndale Bible Publishers (complaint here; preliminary injunction here). The short answer:

The plaintiffs have therefore shown that the contraceptive coverage mandate substantially burdens their religious exercise.

The Tyndale opinion again focuses on the rights of the owners of the company (here, a family foundation) rather than the company itself:

This Court, like others before it, declines to address the unresolved question of whether for-profit corporations can exercise religion within the meaning of the RFRA and the Free Exercise Clause. See, e.g., First Nat’l Bank v. Bellotti, 435 U.S. 765, 777–78 n.14 (1978) (recognizing that corporations have First Amendment speech rights, but declining to “address the abstract question whether corporations have the full measure of rights that individuals enjoy under the First Amendment”); Stormans, Inc. v. Selecky, 586 F.3d 1109, 1119 (9th Cir.2009) (“We decline to decide whether a for-profit corporation can assert its own rights under the Free Exercise Clause …”); Church of Scientology of Cal. v. Cazares, 638 F.2d 1272, 1280 n.7 (5th Cir.1981) (same). Instead, the Court will assess whether Tyndale has standing to assert the free exercise rights of its owners…

Viewing the rights of Tyndale’s owners (in particular, those of the Foundation) as the basis for its RFRA claim, the Court finds that Tyndale has made a satisfactory showing of Article III standing.

The court also found “third party standing”

It bears emphasizing that if the Court accepted the defendants’ position, no Tyndale entity would have standing to challenge the contraceptive coverage mandate—not even the Foundation. This is because, in the defendants’ view, Tyndale—though directly injured by the regulation—cannot exercise religion, and the Foundation—though capable of exercising religion—is not directly injured by the regulation. The third-party standing doctrine serves to avoid such conundrums.

These cases are serious, but the threat is to mandatory contraception coverage, not the entire ACA.

Cross-posted from TIE

@koutterson