Costs in 2002, we spend 14.9% of GNP on health care! Through the 1990s, health expenditures as a share remained fairly constant, since then, they have gone up again
We spent over $5,000 per person on health care in the US. In recent decades, health care costs increase faster than consumer price index
What do we spend all that money on? 1/3 – hospital. services, 1/5 – physician services, 10% - prescription drugs (have doubled recently, services have gone down)
Who pays? In 2002, it was 36% private health insurance, 19% Medicare, 17% Medicaid, 16% out of pocket
In recent decades, Medicare has been bigger than Medicaid, but it’s expanding
We spend a lot more than any other country (Germany – 59% of what we spend per capita, Britain – 39% and they provide universal health care!)
Costs create huge problems! For individuals, for businesses, for state gov’ts – can be the largest budget line, for fed, gov’t
Financing is incredibly complex, but also key to understanding the issues
Quality sometimes magnificent, but often the quality of care provided is poor. Focus on alternative ways of defining and influencing quality
Managed care claims review. Even if you are insured, sometimes you don’t get the $$!
Access, Cost, and Quality in relation to services at the beginning of life and at the end of life
Access to Health Care
Barriers to Access
The Rise and Crisis of Provider-Dominated Health Care
The pre-modern period
Lower class work
In patients’ homes
Hospitals were associated with almshouses or mental institutions
Private charitable hospitals
Enhanced doctors’ education
1887 – 1910 – The turn of the century
Prior to the 19th century, healers were low status and low paid, often women (herbalists, midwives, abortionists)
Paid like barbers – service providers, not professionals
What happened to change that?
Stunning developments in technology and science and the understanding of germ theory
Allopath (germ guys) believed that their theories about treating people were so superior to the herbalists – they enlisted the power of the state to:
Prohibit practice by anyone not licensed by the state – confined the practice of medicine
Persuaded legislatures to put control in the hands of the allopath themselves
State should provide for general rather than specialized licensing
What kinds of problems were we trying to address?
Bad medical care
Why did we reject the other options?
The power of the allopaths was great.
Distrust gov’t control
The best deciders here were the doctors themselves
PGH and Bellevue were the first hospitals – established as the infirmary wards of almshouses
The only gov’t support we had for people who couldn’t work was the almshouses
When those people got sick, they were sent to the infirmary ward
Good place to students to get some practice
Only cared for poor people – the notion that a respectable person would go to a hospital. was crazy! They received care in their own homes
Private hospital. began to crop up; viewed with great distrust; served the teaching purpose
By 1873, there were only about 178 hospital., and most were mental
By 1910, there were over 4,300 hospital. in the US
Non-profit, charitable institutions, governed by the doctors who worked there
In the 1880s, medical education was simple: entrance requirements were lower than that to a good high school
Other doctors trained as apprentices
Now oriented to acute specialty based hospital. care
Science, care, and professional power
Immense expenditures for sophisticated surgery, drugs, and diagnostic tests, and an astonishing inability to address the political, social, and behavioral causes of most illness and injury
Turned towards individualistic, procedure-focused services delivered by thousands or for-profit businesses and formally charitable but actually profitable larger businesses
The rise of public health insurance: 1930-1980
Government run health care fiercely opposed by profession
Restricted to inadequate programs for minorities, better programs for the armed services and veterans
1935 – The Great Depression
Hospital. had proliferated, no health insurance, common for hospital. and doctors to offer a sliding fee scale for services
full pay charity and something in between
That worked until the GD, and then no one could pay
Hospital .were in desperate financial shape
Baylor model school and hospital, no patients – began to contract with the local education system to say if every teacher pays x per month, then when they are sick, they can receive care from the hospital.
Three forms of private health insurance
Indemnity benefits (patient seeks reimbursement)
Service benefits (Blue Cross and Blue Shield, doctors and hospitals participate in plan and accept plan’s payments for services)
Direct services (services provided by the same organization to which a monthly premium is paid)
The struggle over private health insurance
AHA promulgated Blue Cross
Any licensed hospital could use symbol and accept patients and payments
The state authorized the creation of an insurance co that doesn’t need to meet the normal financial requirements that enable a firm promise of delivery
The hospital. that participated promised to provide care – less need for the financial reserve (insurance didn’t need level of security)
State must ensure that the system served the community the plan would be open to anyone in the community, and everyone would be charged the same rate
Couldn’t charge more to higher risk patients
Guaranteed access at uniform price
Every hospital. in community that was licensed is entitled to join the plan
Unlike Baylor, you could pick any hospital. in the community
AHA owned the Blue Cross trademark
Must be controlled by hospital. community reps
Baylor had too much control over the doctors, under BC plan, doctors could choose where to send their patients
Hospital. themselves were collectively in control of the insurance plan
Mixed indemnity and service benefit plan
Doctors agreed to accept plan payments for lower income patients, but retained the right to charge middle and high income patients more
National health insurance
1935 – adopted social security, unemployment, AFDC, etc. to deal with the GD crisis
We didn’t adopt national health insurance
Opposition of medical profession very intense
Blue cross – it made the most sense at the time
Pattern continued well into the 50s
During WWII, we had wage and price controls – big demand for expanding
At the end of WWII, soldiers who had gotten good health care when in the services wanted to continue that level
Enter commercial insurers
Different attitude – they want to exclude high risks and charge different rates
Consequence – left the Blues to cover those rejected by commercial
Blues abandoned open enrollment and the commercial insurers continued to grow
Blues become more and more $$ -particular impact on the elderly – easy to ID as a bad risk
1965 Medicare and Medicaid
How hospitals and doctors came to be paid
Developed in 1950s, by 1960s, provider-dominated health financing was firmly in place
Based on “reasonable costs”
Evolution of government’s role in health care
NIH – federally funded research
Fed. program financed by payroll taxes
Universal eligibility for over 65 or sufficiently disabled
Provides basic coverage for medical services
Does not provide long term care, preventative care, prescription drugs
Administered by gov’t (formally) day to day admin delegated to local Blues offices
Part A hospital insurance for the elderly
Part B medical coverage for persons over 65
Medicare package is too meager for people who are really poor – more of a catastrophic coverage
As a practical matter, most Medicare people also purchase a gap filler
Federal matching funds for state medical assistance programs for the poor
For poor people
A bit of an afterthought
Not wholly fed – cooperative state-fed program
Each state decides, but must meet fed standards
Entitled to fed matching funds for whatever they spend
States have huge discretion in terms of what kind of program they want to create
Most states have chosen to provide a relatively comprehensive package
The crisis of the provider-dominated system
Costs were still determined in large part by the private sector itself
Advances in technology
Inefficient, unregulated, and often medically unnecessary
Responses to cost escalation and the emergence of managed care
Price controls, review of doctors’ decisions, and financial incentives
Managed care the functions of insurance and delivery of health services are integrated into a single corporate arrangement that both insures groups and delivers covered benefits through a defined network of participating providers
HMOs, individual practice associations, PPOs, integrated service systems, POS plans, provider networks
Assumption of a contractual duty to furnish covered care and services
Provision of services through specified provider networks, which are themselves under contract to the managed care entity
Advance control over actual utilization of benefits by both providers and patients
Use of financial incentives in order to influence provider practice and resource utilization
Quality and cost control systems that include credentialing, practice reviews and guidelines, and the reporting of practice data which are used to control providers’ access to the market
National health care reform and the clash of fundamental values
A brief anatomy of national health care reform
Who will pay?
How will the vast sums of money that flow through the system be controlled, contained, and allocated to different types of providers, suppliers, managers, investors, and others?
1994 – defeat of Clinton’s health care reform proposal
Very complex program – universal coverage administered by orgs., designed to appeal to a broad range of interests
Rejected fairly soundly
too complex for anyone to understand
Congress more generally has difficult time adopting complex legis.
Insurance industry that did not want the plan did a brilliant job through using the media (Harry and Louise commercials)
Things that they feared are perfectly legitimate!
Takes away choice
The truth the fears and objections to the Clinton plan are precisely the issues that we are faced with today
Built on American tradition of relying on private corps to weave the safety net to provide basic health benefits, etc. then we have gov’t programs that come in to fill in the gaps (ERISA)
Conflicting values in American health care
Autonomy – professional control
Preferable to any other model – too complex to be legitimately subject to the forms of control that work in other areas (the market, bureaucrats)
Expertise and knowledge
Education and ethics provide a commitment to patient service
But that’s not their area of expertise!
Dominant way that the system was shaped
Remains very powerful today, particularly in response to the perceived excesses of managed care
It’s not a desired good – nobody wants to undergo surgery
Need is generally episodic and unpredictable
Emergency health needs are different
Arose in the 70s in response to the other paradigms
There’s nothing special about health care! It’s not life or death; it’s optional and .'. should not be treated any differently
People don’t confront financial barriers at the time of care and are not cost conscience shoppers
Common Law Baseline
Hurley v. Eddingfield
The physician had been the decedent's family physician. When the decedent became dangerously ill, he sent for the physician. The decedent's messenger informed the physician of decedent's violent sickness, tendered him fees for his services, and stated to him that no other physician was procurable in time and that the decedent relied on him for attention. Without any reason the physician refused to render aid to the decedent. The decedent died. The wrongful act alleged against the physician was his refusal to enter into a contract of employment with the decedent. The trial court sustained the physician's demurrer to the complaint. The court affirmed. The court found that the act regulating the practice of medicine was a preventive, not a compulsive, measure. Thus, the physician, in obtaining the state's license to practice medicine, was not required to practice at all or on other terms than he might choose to accept.
“In obtaining the state’s license to practice medicine, the state does not require, and the licensee does not engage, that he will practice at all or on other terms than he may choose to accept”
Rejected analogy to common carrier or innkeeper
Court finds that the doctor has a right to refuse treatment under the no duty rule
The doctor had not undertaken to provide care in these circumstances
Campbell v. Mincey
When the mother arrived in labor at the emergency room she was instructed to go to another facility at which her physician practiced. She subsequently gave birth to her son in a car in the hospital's parking lot. The hospital then had her transported to the other facility by ambulance. The mother contended that the hospital's policy that resulted in the refusal of treatment was an unreasonable restriction upon the use of a public hospital by the mother and other similarly-situated individuals. The court dismissed the complaint. The court determined that the policy that required that a local physician authorize admission of a patient, except in true emergency situations, was intended to insure a doctor would be available for follow-up treatment of the patient. The court found that the mother had been a patient of the hospital on the occasion of a previous pregnancy and that the emergency room was used more frequently by blacks than by whites. The court also found that a large portion of the patients treated at the hospital were Medicaid patients. Thus, the court found no basis for the mother's contention that she was refused treatment because she was black or indigent.
Question: whether the hospital regulations requiring reference of incoming patients by local physicians except in true emergencies operates in a reasonable manner to further a legitimate state objective?
Holding: “In the absence of some proof that this regulation has or can operated in some manner to inflict an injury upon some individual, the court must accept the considered judgment of the medical specialists who are charged with the responsibility of administering the hospital
Needed a pre-existing relationship with a doctor in order to be admitted to the hospital
There was indeed an emergency .'. the hospital had a duty to admit the patient?
What’s the basis of that duty?
Detrimental reliance they are operating an ER and .'. put themselves out there that they will take care of emergency medical situations!
∆ there was no emergency! But on these facts, that’s very difficult – giving birth in the parking lot!
Another theory is undertaking
Quasi-public institutions have an obligation to provide care in an emergency
This theory rarely adopted, in part b/c it’s a very broad theory – tough to figure out what makes it “public”
Analogy to common carriers/innkeepers
Services that hospital provides are much more complex, the courts ability to judge whether the hospital has a good reason to turn someone away is much different than that of a common carrier
But there are some similarities – public function, service people’s needs, recognition that when people are in need they should receive services
Assuming that the Πs can establish a duty, the ∆’s responses?
Can’t accept everyone, or else they wouldn’t be able to function properly! Undermines ability to think intelligently about what we want to do and who we want to treat; hospital. have adopted a sensible policy that patients should have a doctor!
Lyons v. Grether
Walker v. Pierce
Payton v. Weaver
What do these three cases lead us to believe?
They allowed the doctor to make some conditions, but when the state law comes into play, the doctor can’t override that
Doctors have very broad freedom to condition the availability of their services, up to the point where it would violate some law.
Impose conditions on licenses
Place conditions on reimbursement
Competing issues re: hospital and doctor duty to care?
No duty principle
State Efforts to Assure Access
Thompson v. Sun City Community Hospital
A minor was injured and taken to a private hospital, which later transferred the boy to a county hospital for financial reasons. He survived but with residual impairment of his left leg. His mother, as guardian ad litem, brought a malpractice action against the private hospital and the physicians alleging that her son was injured by the failure to admit and the consequent delay in repair of his damaged artery. On appeal, the mother alleged that trial court erred in misstating the law to be applied on the proper standard of care and in instructing the jury on the issues of breach of duty of care and causation. The court affirmed the decision in favor of the physicians because the physicians' actions did not cause refusal of medical treatment. However, the court found, as a matter of public policy, that licensed hospitals were required to accept and render emergency care to all patients who presented themselves in need, and that the patient was not to be transferred until all medically indicated emergency care was completed. This standard of care required private hospitals to provide emergency care that was medically indicated without consideration of the economic circumstances
Question: was the patient transferred for other reasons? Did the transfer cause new or additional injury or aggravate any pre-existing injury?
Holding: “The patient was transferred for financial reasons while emergency care was medically indicated. As a matter of law, this was a breach of the hospital’s duty.” Because the patient may have had a chance for improved recovery, the question of causation must go to the jury.
“Charging hospitals with a legal duty to render emergency care to indigent patients does not ignore the distinctions between public and private hospitals. Imposition of a duty to render emergency care to indigents simply charges private hospitals with the same duty as public hospitals under a statutory plan which permits reimbursement from public funds for the emergency care.”
“Reasonable cause for transfer before completion of emergency care refers to medical considerations relevant to the welfare of the hospital. A transfer based in the forbidden criterion of economic considerations may be for the convenience of the hospital but it is hardly medically indicated.”
In the 70s, we began to impose statutes that hospital. did have a duty to provide emergency care
AZ was the only state not to join Medicaid until 1980; rather, they had a working system that required counties to pay hospital. for care provided to indigents and to provide emergency care by statute, tort damages
Statute says that you must provide emergency care – court merges the questions of whether this was emergency and whether this surgery was medically necessary
Third question of whether he was transferred for medical reasons
Is it a question of fact or law whether an emergency existed?
Court goes on to find that there was a breach as a matter of law – b/c he was transferred for financial reasons
That both allows a proof of a violation and allows a finding as a matter of law whether there was a factual emergency
Π can’t show that the transfer caused the injury normal standard of proof
More likely than not that but for the ∆’s actions, the injury would have occurred
Does not show here, instead the court adopts an alternative standard that is based on whether the Π lost the chance
State emergency care requirements
TX, CA, MD adopted very broad laws with strong penalties which required permission from the transferee hospital
NY creates criminal liability
Anyakora doctor made argument that doctor obligations are different than hospital obligations
Ford sends woman to another hospital b/c they are on “diversion” – she’s convicted of a criminal action
Good Samaritan laws
Provide doctors with immunity from liability for negligence – is that likely to make a difference?
It doesn’t actually have any effect; the risk of being sued is just too great.
Nonetheless, they have been extended to immunize doctors in a hospital that responded to a STAT call to seek other people to come and help. If you respond, you’re entitled to immunity
Federal Efforts to Assure Access
Examination and treatment for emergency medical conditions and women in labor EMTALA
Builds on the lessons we learned from Hill-Burton experience (see below): no charity care stipulation
Enacted by Congress in 1986
“Patient anti-dumping statute”, Hospitals must