Grading the ACA as Equal Protection Statute

The Affordable Care Act is sprawling.  Some of its myriad provisions may (or may not!) reduce healthcare costs.  Think of accountable care organizations, the hospital readmission reduction program, or even the preventive services mandate.  And so, the Act’s success is often evaluated by asking whether it has helped reduce healthcare costs.  (See, e.g., David Cutler here.)

Other of the ACA’s provisions are intended to promote financial security in the face of illness.  The Act’s most litigated provisions, requiring that people buy insurance, expanding Medicaid, and creating exchanges, can be understood primarily in this light.  And so, the Act’s success is also often evaluated by asking whether it has truly promoted financial security.  (See today’s New York Times piece from Margoret Sangor-Katz on the subject of underinsurance post-ACA, or Aaron E. Carroll’s take from December.)

A third way of understanding the ACA’s reforms–and evaluating its success or failure–too often gets left out (as it was by the NY Times here): The ACA can perhaps most coherently be thought of as an equal protection statute.

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Regulating Wellness Through Employers: Mitigating the Knowledge Gap

Some of the behavioral changes that the Affordable Care Act seeks to bring about are prompted directly by the Act or a federal agency acting pursuant to the Act.  The “individual mandate” that people buy health insurance is one example; individuals who do not change their behavior to comply with that particular provision of the law are subject to a tax penalty imposed by the IRS.

But much of the work of the ACA is done through regulatory intermediaries that are themselves incentivized by the Act to find ways to bring about the end-user behavioral changes that the ACA is really after.  Medicaid expansion is a straightforward example–under the ACA the federal government does not provide insurance coverage to those who make less than 133% of the federal poverty line, rather, it incentivizes states to do so.  Accountable Care Organizations are another somewhat more roundabout example: the Act incentivizes doctors to form organizations that will themselves incentivize doctors to coordinate care and patients to obtain more value-maximizing services.

Like any principal-agent relationship, regulating through an intermediary has benefits and costs.  The intermediary (state, employer, insurer, doctor, etc.) may be differently positioned than the federal government to obtain information about, and influence the behavior of, the actors whose collective behavior we ultimately care about, for better or worse.  And certain intermediaries may be differently responsive to the concerns of those impacted by the policies they enact than the federal government, again for better or worse. Continue reading

Exploring The Significant State-To-State Variation In Marketplace Enrollment

A new post by the Petrie-Flom Center’s Academic Fellow Matthew J. B. Lawrence on the Health Affairs Blog, as part of a series stemming from the Third Annual Health Law Year in P/Review event held at Harvard Law School on Friday, January 30, 2015.

What role did geography, advertising, community, Navigators, and the controversy surrounding the Affordable Care Act (ACA) play in consumers’ decisions whether to purchase health insurance in the individual marketplaces? The percentage of potential exchange marketplace enrollees who actually made use of the marketplace to purchase insurance varied widely from state to state for 2014 and 2015.

As of February 22, 2015, for example, there were eight states with enrollment at 50 percent or greater and eight states with enrollment at 25 percent or lower. (Per the Kaiser Family Foundation, the top eight were Vermont, Florida, Maine, DC, Delaware, Pennsylvania, New Hampshire, and North Carolina. The bottom eight were Colorado, Ohio, Alaska, Hawaii, North Dakota, Minnesota, South Dakota, and Iowa).

It would be an interesting and challenging task to explain this variation empirically. Generating reliable statistical inferences from inter-state comparisons is notoriously difficult, and the variables at play here range from the easily measured (percent of population eligible for subsidies, navigator grant amounts, number of participating insurers, premiums) to the not-so-easily measured (enthusiasm for Obamacare, efficacy of state or federal outreach efforts, geography, education, availability and usefulness of charity care and emergency Medicaid, functionality of state exchange website, population health, availability of health services). […]

Read the full post here.

How to Fix Our Hospital Pricing Problem (and How Not To)

Guest post by Erin Fuse Brown
[Cross-posted from Center for Law, Health and Society Blog]

Last month, Slate columnist Reihan Salam wrote a provocative article about outrageous hospital prices that are driven, according to Salam, by greed, avarice, and market power. Salam gets a few things dead right, namely his diagnosis that we have a massive hospital pricing problem that is bleeding us dry and that the problem is largely caused by growing hospital market power. However, he misses the mark when laying out policy recommendations to curb monopoly-driven hospital prices.

The solutions

Antitrust:  Salam favors using antitrust enforcement to prevent health care consolidation and to reduce barriers to entry for competition. The biggest problem with antitrust enforcement is that it can do little to reverse or break up existing monopolies. Antitrust laws will be unable to help the vast majority of hospital markets that are already concentrated. Second, even with its improving success rate in court, the FTC simply cannot prevent or police the ongoing wave of hospital mergers, resulting in price increases up to 40% price increases in some areas. To be sure, increased antitrust enforcement is a necessary element of the strategy to control hospital prices to stem the tide of consolidation that is driving prices upward. But antitrust is no silver bullet, especially for hospital markets that have already become noncompetitive. Continue reading

Mainstreaming Medical Legal Partnerships (MLPs)

Last week, I had the opportunity to speak at the 10th Annual Summit of the National Center for Medical Legal Partnership in McLean, Virginia. The summit brought together more than 400 people working to “mainstream” medical legal partnerships (MLPs). The theory of change is that through these partnerships, the health care sector can begin to more systematically address social, behavioral and environmental determinants of health. Particularly on behalf of patients who are low-income, legal professionals address root causes of illness by working with utilities companies, landlords, social service agencies and the court system.

Concretely, MLPs are programs in which civil legal aid agencies, health care organizations and public health departments cooperate to train their staffs, treat individuals and identify population level problems. Most often, it is civil legal aid agencies that provide expertise in the laws around housing and public benefits, and spend their resources to ensure access to housing subsidies, food benefits, health insurance and employment. Some law firms also contribute pro bono time to the cause, as do some law schools in the form of clinics.

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Ending Institutional Corruption Conference, May 1 & 2

On Friday, May 1, and Saturday, May 2, several Petrie-Flom Center affiliates will participate in the Edmond J. Safra Center for Ethics at Harvard University conference “Ending Institutional Corruption,” held in the Milstein Rooms in Wasserstein Hall at Harvard Law School. Participants include:

  • Christopher T. Robertson, Academic Fellow alumnus, speaking on “The Institutional Advantages of Courts, and the Potential of Litigation, as a Solution to Institutional Corruption”
  • Christine Baugh, 2014-2015 Student Fellow, conference co-organizer
  • Aaron S. Kesselheim, affiliated faculty member, speaking on “Trends in the Use of Expedited Drug Review and Approval Designations at the FDA”
  • Judge Nancy Gertner, affiliated faculty member, speaking on “The Limits of the Criminal Sanction”

For a full description of the conference, a complete agenda, and registration information, click here!

Replacing the Affordable Care Act?

By David Orentlicher

[cross-posted at HealthLawProfs blog]

With the future of the Affordable Care Act in doubt after last week’s hearing before the U.S. Supreme Court, Republican lawmakers are busily preparing back-up legislation. New options should not be necessary—the government should prevail against those challenging its interpretation of the Act’s premium subsidy provisions. But it is prudent to consider alternatives in the event that the Court rules against the government.

While most of the ideas being floated would do little to bring health care insurance to the uninsured, there is an option that really could expand access to coverage while also containing health care spending. And it could be attractive to Republicans and Democrats alike on Capitol Hill. Continue reading

King v. Burwell: Appreciating the Stakes of the Case

Yesterday, the Supreme Court heard oral arguments in King v. Burwell, and the Justices seemed split on the central issue of whether the Affordable Care Act (ACA) permits health insurance subsidies to flow to citizens of states that have chosen not to establish their own insurance exchanges.  Trying to predict the outcome of a case like this is notoriously difficult, but I do want to highlight briefly an important difference between the Court three years ago, when it decided NFIB v. Sebelius, and the Court yesterday.

In NFIB, seven Justices declared that the ACA’s Medicaid expansion was unconstitutionally coercive, concluding that the Secretary of Health and Human Services could not condition existing Medicaid funds on a state’s failure to expand Medicaid.  However, the Secretary was instead permitted to offer additional funds to states choosing to expand Medicaid, effectively making the expansion optional.  The Court at the time understood that this outcome could result in a national patchwork, in which certain states would adopt the Medicaid expansion and others would not. Continue reading

UPDATE: Death Spirals…Really to the Rescue?

UPDATE: I posted what follows in January, reflecting on the JALSA amicus brief led by Prof. Abigail Moncrieff from BU that argues that petitioners’ interpretation in King v. Burwell would make the ACA unconstitutional by forcing states to choose between establishing exchanges and torpedoing their individual health insurance markets.  In other words, “death spirals to the rescue.”  It looks like that argument got noticed by Justice Kennedy, who pressed the petitioners hard for a response at oral argument this morning.  (See here.)  A very interesting development, and congratulations are in order to Abby and the other JALSA signatories (as well as other amici who pressed this argument) for at the very least helping to call attention to an argument that wound up playing big at argument.  Will be interesting to see how the opinion comes out!

ORIGINAL POST (Jan. 27, 2015):

We’ve heard a lot about “death spirals” and how they could stand in the way of the Affordable Care Act’s goal of a functioning individual health insurance marketplace.  Seth Chandler has an interesting blog devoted to the subject, “ACA Death Spiral.”  And those who have been following King v. Burwell, the Supreme Court’s latest ACA case, have been predicting that a ruling against the government there would be disastrous because it would only exacerbate the “death spiral” threat to individual health insurance markets.  (See a sum-up of such predictions here.)

But could death spirals save the ACA?  According to a fascinating amicus brief filed in the King case by a number of interest groups and co-signed by several prominent law professors and Bill of Health contributors (I understand that Abigail Moncrieff is the driving force behind the brief, joined by Allison Hoffman, Sharona Hoffman, Russell Korobkin, Joan Krause, Stephen Marks,  Kevin Outterson, and Theodore Ruger), the answer might be yes.  The argument boils down to “death spirals to the rescue.”  (Here is a copy: 14-114 bsac JALSA.)

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Open Payments: Early Impact And The Next Wave Of Reform

A new post by Tony Caldwell and Christopher Robertson on the Health Affairs Blog, as part of a series stemming from the Third Annual Health Law Year in P/Review event held at Harvard Law School on Friday, January 30, 2015.

The Physician Payments Sunshine Act, a provision in the Affordable Care Act, seeks to increase the transparency of the financial relationships between medical device and drug manufacturers, physicians, and teaching hospitals. Launched on September 30, 2014 by the Centers for Medicare & Medicaid Services (CMS), the Open Payments database collects information about these financial relationships and makes that information available to the public.

As of early February, the Open Payments database includes documentation of 4.45 million payments valued at nearly $3.7 billion made from medical device and pharmaceutical manufacturers to 546,000 doctors and 1,360 teaching hospitals between August 2013 and December 2013. This included 1.7 million records (totaling $2.2 billion) without the names of physicians or teaching hospitals who received the payments.

These records were intentionally de-identified by CMS because the records had not been available for review and dispute for 45 days, or because the records were not matched by CMS to a single physician or teaching hospital due to missing or inconsistent information within the submitted records. Future reports will be published annually and will include data collections from a full 12 month period. […]

Continue reading here.

Obamacare and States Rights: on the same side of the line this time, in King v. Burwell

By Abbe Gluck

Next week the Court hears a major challenge to Obamacare, King v. Burwell. Readers of this blog know the case has deep importance for health care. But it also is a big case for law. I have previously detailed why the case is the big test for the Court’s current text-oriented statutory-interpretation philosophy known as textualism. Today, in Politico, I explain why the case is also fundamentally about state rights. The question is whether the Court’s many federalism-protecting doctrines–which, let’s not forget, the Court applied against the Government in the last Obamacare case–whether those federalism doctrines, like the Court’s textualist rules, are sufficiently legitimate and objective such they will apply regardless of which side they happen to support, even in a case as politicized as this one. After all, isn’t that the point of having a rule of law in the first place?

Here is an excerpt and a link. Continue reading

Going for gold: behavioral science reveals new biases in ACA exchange shopping

A new New England Journal of Medicine commentary by Peter A. Ubel, M.D., David A. Comerford, Ph.D., and Eric Johnson, Ph.D. highlights significant flaws in the way information is presented to insurance shoppers on state and federal exchange websites. The authors present original survey data to support the argument that subtle aspects of current website designs inappropriately bias decision making. The authors make their case most strongly in an analysis of the well-known gold, silver and bronze labels:

Consider the decision to lump health plans into categories with names such as bronze (for low monthly premiums and high out-of-pocket costs) and gold (for higher monthly premiums and lower out-of-pocket costs). These labels could have unintended effects on people’s attitudes toward which plans are best. After all, gold, silver, and bronze convey best, second best, and third best through association with sporting events, but the best plan for one enrollee will be different from the best plan for another.

To test whether such associations might influence people’s perceptions of insurance plans, two of us recruited a convenience sample of participants from public buses in Durham, North Carolina, and asked them which category of plans they would look at first if they were shopping for health insurance. To half the people, we described the gold plans as having higher monthly premiums and lower out-of-pocket costs — the language used by many exchanges. For the other half, we switched the gold and bronze plans, describing the gold plans as having lower monthly premiums and higher out-of-pocket costs.

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Discrimination, by what yardstick?

By Kelsey Berry

It’s time to talk about discrimination again — this time, in insurance benefit design.

A recent study in NEJM by Jacobs and Sommers has coined the term “adverse tiering” to describe the use of drug formularies by insurers “not to influence enrollees’ drug utilization but rather to deter certain people from enrolling [in the plan] in the first place.” [emphasis mine] Evidence of adverse tiering includes the placement of all drugs for certain condition in the highest cost-sharing tiers of drug formularies. This practice, it turns out, occurs fairly frequently – at least when it comes to a common HIV medication, nucleoside reverse-transcriptase inhibitors (NRTIs). Jacobs and Sommers analyzed the placement of NRTIs on formularies for 48 plans in 12 states using the federally facilitated insurance marketplaces, and found evidence of adverse tiering in 25% of plans. Their conclusion? Many insurers may be using benefit design to dissuade sicker people from enrolling in their plans. This raises concerns about adverse selection, as well as discrimination on the basis of health status – a practice the ACA was meant to address via community rating and guaranteed issue requirements, among others.

The study provides an important data point as we continue to assess whether the ACA is living up to our goals for health care reform. I believe we’ll see several more studies of this nature coming down the line, drawing attention to insurer practices that fail to comply with regulations, that are creative interpretations of vague requirements, or that aren’t addressed in existing regulations and may require new scrutiny. As we digest these, I’ll raise two important points for consideration:

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Nonprofit Hospitals Sue Patients, and New IRS Rules Offer Limited Protection

[Cross-posted from the Center for Law, Health and Society Blog at Georgia State University]

By Guest Contributor Erin C. Fuse Brown

Last month, NPR and ProPublica reported a story that would be shocking if it weren’t sadly familiar about how nonprofit hospitals like Heartland Regional Medical Center in Missouri are suing their patients and garnishing their wages for unpaid bills.  A few days later, on December 31, 2014, the IRS issued final rules for tax-exempt hospitals that ostensibly will make these practices more difficult, if not illegal.

The IRS rules implement the requirements of Section 501(r) of the Internal Revenue Code added by the Affordable Care Act in 2010. Despite characterizations that these are “sweeping new rules” that protect financially vulnerable patients from excessive charges and aggressive debt collection by nonprofit hospitals, the rules provide fairly thin and spotty levels of protection for patients. Continue reading

Tomorrow: 3rd Annual Health Law Year in P/Review

P-Review_2015_poster_with_borderJanuary 30, 2015 7:45 AM – 5:00 PM
Wasserstein Hall, Milstein East AB
1585 Massachusetts Avenue, Cambridge, MA

Please join us for the Third Annual Health Law Year in P/Review symposium, with leading experts discussing major developments during 2014 and what to watch out for in 2015. The discussion at this day long event will cover hot topics in such areas as health insurance, health care systems, public health, innovation, and other issues facing clinicians and patients.

The full agenda with speakers is available on our website.

Attendance is free and open to the public, but space is limited and registration is required. Please register here. Contact petrie-flom@law.harvard.edu with questions.

Health Care Policy by Common Sense?

By David Orentlicher

[Cross-posted at HealthLawProfs]

In announcing the federal government’s approval of Indiana’s Medicaid expansion, Governor Mike Pence invoked common sense in defending his insistence that beneficiaries shoulder a share of their health care premiums. According to Pence, “It’s just common sense that when people take greater ownership of their health care, they make better choices.”

But relying on common sense is not a good way to make health policy. Common sense leads people to incorrectly believe that they are more likely to catch a cold by going out in cold weather or to take megadoses of vitamins that provide no additional health benefit and can be toxic. Common sense also leads physicians down the wrong path. Because lowering blood sugar has been good for the health of diabetics, medical experts recommended tight control of blood sugar levels. But that resulted in an increased risk of death for many patients. Continue reading

Death Spirals…to the Rescue!

We’ve heard a lot about “death spirals” and how they could stand in the way of the Affordable Care Act’s goal of a functioning individual health insurance marketplace.  Seth Chandler has an interesting blog devoted to the subject, “ACA Death Spiral.”  And those who have been following King v. Burwell, the Supreme Court’s latest ACA case, have been predicting that a ruling against the government there would be disastrous because it would only exacerbate the “death spiral” threat to individual health insurance markets.  (See a sum-up of such predictions here.)

But could death spirals save the ACA?  According to a fascinating amicus brief filed in the King case by a number of interest groups and co-signed by several prominent law professors and Bill of Health contributors (I understand that Abigail Moncrieff is the driving force behind the brief, joined by Allison Hoffman, Sharona Hoffman, Russell Korobkin, Joan Krause, Stephen Marks,  Kevin Outterson, and Theodore Ruger), the answer might be yes.  The argument boils down to “death spirals to the rescue.”  (Here is a copy: 14-114 bsac JALSA.)

Continue reading

Raising the King v. Burwell Stakes

By Nicolas Terry

Today, the Washington Post ran an interview with Laurence Tribe about the King v. Burwell subsidy litigation (recall that oral arguments are scheduled for March 4). Tribe speculated that Chief Justice Roberts will once again be the swing vote, as he was in Nat’l Fed. of Independent Bus. v. Sebelius. Tribe seems to predict another pragmatic Roberts opinion (and one that might bring Justice Kennedy along), finding the subsidy provisions are at worse ambiguous and that the executive is owed deference as argued by the eminently reasonable Nick Bagley.

Even though Tribe wouldn’t label Roberts as a consequentialist, he does believe that the pragmatic Roberts would be influenced by the impact on the States, the disruption of insurance markets, and the consequences for the newly insured. If the Chief wants more data on those issues he could do no better than to consult two excellent reports from the Urban Institute. The first estimates that a declaration that the subsidies are invalid “would increase the number of uninsured in 34 states by 8.2 million people… and eliminate $28.8 billion in tax credits and cost-sharing reductions in 2016 ($340 billion over 10 years) for 9.3 million people.” Perhaps as important, the Urban Institute’s model also predicts general turmoil in private, non-group insurance markets as the young and healthy would disproportionately drop coverage, causing a predicted 35% increases in premiums.

The second and most recent brief from the Urban Institute begins to put faces on those who will suffer: “Over 60 percent of those who would become uninsured are white, non-Hispanic and over 60 percent would reside in the South. More than half of adults have a high school education or less, and 80 percent are working.”

The executive shouldn’t need such help given the ACA’s clear intent as to how the federal and state exchanges were meant to function. But, if a dose of pragmatism is required to secure a majority of the Court, the stakes couldn’t be any clearer.

Last Year Was A Wild One For Health Law — What’s On The Docket For 2015?

A new blog post by Greg Curfman, Holly Fernandez Lynch and I. Glenn Cohen on the Health Affairs Blog:

Everywhere we look, we see the tremendous impact of new legal developments—whether regulatory or statutory, federal or state—on health and health care. These topics range from insurance to intellectual property to religion to professionalism to civil rights. They remain among the most important questions facing Americans today.

This post is the first in a series that will stem from the Third Annual Health Law Year in P/Review event to be held at Harvard Law School on Friday, January 30, 2015. The conference, which is free and open to the public, brings together leading experts to review major developments in health law over the previous year, and preview what is to come.

Read the full post here, and register for the Third Annual Health Law Year in P/Review for free here.

Next Friday (1/30): Third Annual Health Law Year in P/Review

P-Review_2015_poster_with_borderJanuary 30, 2015 8:00 AM – 5:00 PM
Wasserstein Hall, Milstein East AB
1585 Massachusetts Avenue, Cambridge, MA

Please join us for the Third Annual Health Law Year in P/Review symposium, with leading experts discussing major developments during 2014 and what to watch out for in 2015. The discussion at this day long event will cover hot topics in such areas as health insurance, health care systems, public health, innovation, and other issues facing clinicians and patients.

The full agenda with speakers is available on our website.

Attendance is free and open to the public, but space is limited and registration is required. Please register here. Contact petrie-flom@law.harvard.edu with questions.