_________________________________________________________________
E M P L O Y E E B E N E F I T S , C O M P E N S A T I O N
& P E N S I O N L A W
Vol. 4, No. 13: July 17, 2003
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Publisher: LSN Employment, Labor, Compensation & Pension Journals
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Topic of This Issue:
Health Law and Economics
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T A B L E of C O N T E N T S
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NEW and FORTHCOMING ARTICLES
"The Struggle over Employee Benefits: The Role of Labor in
Influencing Modern Health Policy"
The Milbank Quarterly, Vol. 81, pp. 45-73, 2003
DAVID ROSNER
Columbia University
GERALD MARKOWITZ
Columbia University
"Employers' Benefits from Workers' Health Insurance"
The Milbank Quarterly, Vol. 81, pp. 5-43, 2003
ELLEN O'BRIEN
Georgetown University
"The Invention of Health Law"
California Law Review, Vol. 91, 2003
M. GREGG BLOCHE
Georgetown University Law Center
"Voices Unheard: Barriers to Expressing Dissatisfaction to Health
Plans"
The Milbank Quarterly, Vol. 80, pp. 709-755, 2002
MARK SCHLESINGER
Yale University
School of Medicine
SHANNON M. MITCHELL
Yale University
School of Medicine
BRIAN ELBEL
Yale University
School of Medicine
"The Rise and Fall of Managed Care: A Predictable 'Tragic
Choices' Phenomenon"
St. Louis University Law Journal, Vol. 47, Spring 2003
DAVID ORENTLICHER
Indiana University School of Law
WORKING PAPERS
"A Workers' Lobby to Provide Portable Benefits"
JONI HERSCH
Harvard University
Harvard Law School
"The Effect of Private Insurance on Measures of Health: Evidence
from the Health and Retirement Study"
AVI DOR
Case Western Reserve University
Weatherhead School of Management
National Bureau of Economic Research (NBER)
JOSEPH J. SUDANO
Case Western Reserve University
Center for Health Care Research and Policy
DAVID W. BAKER
Division of General Internal Medicine - Feinberg
School of Medicine of Northwestern University
"Cicio v. Does, 2003 U.S.App.LEXIS 2925 (2d Cir. 2/11/03) - Can
We Extricate Ourselves from the Supreme Court's Quagmire of ERISA
Remedies?"
MARK D. DEBOFSKY
Daley, DeBofsky & Bryant
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N E W and F O R T H C O M I N G Articles
_________________________________________________________________
"The Struggle over Employee Benefits: The Role of Labor in
Influencing Modern Health Policy"
The Milbank Quarterly, Vol. 81, pp. 45-73, 2003
BY: DAVID ROSNER
Columbia University
GERALD MARKOWITZ
Columbia University
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=381657
Contact: DAVID ROSNER
Email: Mailto:dr289@columbia.edu
Postal: Columbia University
3022 Broadway
New York, NY 10027 UNITED STATES
Phone: 212-305-1727
Fax: 212-342-1986
Co-Auth: GERALD MARKOWITZ
Email: Mailto:gem67@columbia.edu
Postal: Columbia University
3022 Broadway
New York, NY 10027 UNITED STATES
ABSTRACT:
After organized labor failed to institute national health
insurance in the mid–twentieth century, its influence on health
care policy diminished even further. This article proposes an
alternative interpretation of the development of health care
policy in the United States, by examining the association of
health policy with the relationships between employers and
employees. The social welfare and health insurance systems that
resulted were a direct outcome of the pressures brought by
organized and unorganized labor movements. The greater
dependency created by industrial and demographic changes,
conflicts between labor and capital over the political meaning
of disease and accidents, and attempts by the political system
to mitigate the impending social crisis all helped determine new
health policy options.
______________________________
"Employers' Benefits from Workers' Health Insurance"
The Milbank Quarterly, Vol. 81, pp. 5-43, 2003
BY: ELLEN O'BRIEN
Georgetown University
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=381656
Contact: ELLEN O'BRIEN
Email: Mailto:obriene@georgetown.edu
Postal: Georgetown University
Washington, DC 20057 UNITED STATES
ABSTRACT:
Even though many employers believe that health insurance and
health affect employees' productivity and firms' performance,
health economists typically overlook and rarely measure firms'
returns on health-related investments. Some research, however,
suggests that firms may benefit economically by providing health
insurance coverage for workers and their families. For example,
health coverage may help employers recruit and retain
high-quality workers. Health may contribute to productivity by
reducing the costs of absenteeism and turnover and by increasing
workers' productivity. This article reviews the evidence and
proposes an agenda for future research. A better understanding
of the benefits to employers of offering health coverage to
workers may help clarify employers' behavior and help private
employers and public officials make appropriate investments in
health.
______________________________
"The Invention of Health Law"
California Law Review, Vol. 91, 2003
BY: M. GREGG BLOCHE
Georgetown University Law Center
Paper ID: Georgetown Public Law Research Paper No. 405801;
Georgetown Law and Economics Research Paper No. 405801
Contact: M. GREGG BLOCHE
Email: Mailto:bloche@law.georgetown.edu
Postal: Georgetown University Law Center
600 New Jersey Avenue, NW
Washington, DC 20001 UNITED STATES
Phone: 202-662-9123
Fax: 202-662-9680
ABSTRACT:
By default, the courts are inventing health law. The law
governing the American health system arises from an unruly mix
of statutes, regulations, and judge-crafted doctrines conceived,
in the main, without medical care in mind. Courts are
ill-equipped to put order to this chaos, and until recently they
have been disinclined to try. But political gridlock and popular
ire over managed care have pushed them into the breach, and the
Supreme Court has become a proactive health policy player. How
might judges make sense of health law's disparate doctrinal
strands? Scholars from diverse ideological starting points have
converged toward a single answer: the law should look to deploy
medical resources in a systematically rational manner, so as to
maximize the benefits that every dollar buys. This answer bases
the orderly development of health care law upon our ability to
reach stable understandings, in myriad circumstances, of what
welfare maximization requires. In this Article, I contend that
this goal is not achievable. Scientific ignorance, cognitive
limitations, and normative disagreements yield shifting,
incomplete, and contradictory understandings of social welfare
in the health sphere. The chaotic state of health care law today
reflects this unruliness. In making systemic welfare
maximization the lodestar for health law, we risk falling so far
short of aspirations for reasoned decision making as to invite
disillusion about the possibilities for any sort of rationality
in this field. Accordingly, I urge that we define health law's
aims more modestly, based on acknowledgment that its rationality
is discontinuous across substantive contexts and changeable with
time. This concession to human limits, I argue, opens the way to
health policy that mediates wisely between our desire for public
action to maximize the well being of the many and our intimate
wishes to be treated non-instrumentally, as separate ends. I
conclude with an effort to identify the goals that health law,
so constructed, should pursue and to suggest how a strategy of
accommodation among these goals might apply to a variety of
legal controversies.
______________________________
"Voices Unheard: Barriers to Expressing Dissatisfaction to Health
Plans"
The Milbank Quarterly, Vol. 80, pp. 709-755, 2002
BY: MARK SCHLESINGER
Yale University
School of Medicine
SHANNON M. MITCHELL
Yale University
School of Medicine
BRIAN ELBEL
Yale University
School of Medicine
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=370531
Contact: MARK SCHLESINGER
Email: Mailto:MARK.SCHLESINGER@YALE.EDU
Postal: Yale University
School of Medicine
Department of Epidemiology and Public Health
60 College Street, P.O. Box 208034
New Haven, CT 06520-8034 UNITED STATES
Phone: 203-785-4619
Fax: 203-785-6287
Co-Auth: SHANNON M. MITCHELL
Email: Mailto:shannon.mitchell@yale.edu
Postal: Yale University
School of Medicine
Department of Epidemiology and Public Health
60 College Street, P.O. Box 208034
New Haven, CT 06520-8034 UNITED STATES
Co-Auth: BRIAN ELBEL
Email: Mailto:brian.elbel@yale.edu
Postal: Yale University
School of Medicine
Department of Epidemiology and Public Health
60 College Street, P.O. Box 208034
New Haven, CT 06520-8034 UNITED STATES
ABSTRACT:
Consumers dissatisfied with their health plan can either "exit"
(switch service providers) or "voice" (complain to the current
provider). Policymakers' efforts to help consumers voice their
dissatisfaction to health plans or external mediators have been
disappointing, in part because little is known about the
determinants of voice. This article represents the first
comprehensive assessment of voicing in response to problematic
experiences with health plans. A national consumer survey from
1999 is used to test hypotheses about characteristics of
problems, patients, and settings that might inhibit voice and
assess state regulations intended to enhance voice. Although
problems associated with plans led to more voice than exit,
voice is circumscribed by several factors: certain groups, such
as racial minorities, do not express their grievances as often;
episodes with severe health consequences for patients are not
reported as regularly. The findings suggest that even though
regulatory initiatives have not increased the frequency of
voice, they have made grievances more effective, at least in
jurisdictions where citizens know about the laws.
______________________________
"The Rise and Fall of Managed Care: A Predictable 'Tragic
Choices' Phenomenon"
St. Louis University Law Journal, Vol. 47, Spring 2003
BY: DAVID ORENTLICHER
Indiana University School of Law
Contact: DAVID ORENTLICHER
Email: Mailto:DORENTLI@IUPUI.EDU
Postal: Indiana University School of Law
530 West New York Street
Indianapolis, IN 46202 UNITED STATES
Phone: 317-274-4993
Fax: 317-278-4785
ABSTRACT:
Once touted as the answer to defects in fee-for-service health
care insurance, managed care has seen its fortunes rise and fall
over the past decade. Initially, managed care techniques became
widespread, and they slowed the growth in health care costs.
Indeed, premiums for health care insurance went from
double-digit increases in the late 1980s to a less than two
percent increase in 1996. More recently, however, public
dissatisfaction with managed care has led insurers to jettison
key cost-containment strategies of managed care, including
closed panels of doctors, primary-care gatekeeping and
pre-admission authorization. As insurers abandoned these
hallmarks of managed care, health care costs have resumed their
rapid growth.
Scholars have attributed the fall of managed care to a number
of factors, including imperfections in the market for health
care insurance, the use by some managed care plans of egregious
strategies for cutting costs, and a lack of consumer choice or
voice in the operation of managed care.
This article offers a different explanation for the rise and
fall of managed care. Managed care has failed not because of
market imperfections, a bad design, or because its design was
poorly executed. Rather, the United States's experience with
managed care illustrates what happens when society tries to
ration health care resources, regardless of the mechanism used
for rationing. In this view, problems with the health care
market or the design and implementation of managed care might
have affected how quickly managed care failed, but they did not
affect whether managed care would fail. As a method for making
the "tragic choices" involved in health care rationing, managed
care's failure was inevitable, as predicted by the analysis of
Guido Calabresi and Phillip Bobbitt in their book, Tragic
Choices.
Calabresi and Bobbitt explain that the difficult
life-and-death choices entailed in rationing can only be made by
hiding them from public scrutiny. Managed care provided a method
for disguising rationing. However, when the hidden "tragic
choices" were exposed, the method for making those choices
became discredited, and the public had demanded a new method for
allocating health care.
JEL Classification: I1, H4
______________________________
W O R K I N G P A P E R Abstracts
_________________________________________________________________
"A Workers' Lobby to Provide Portable Benefits"
BY: JONI HERSCH
Harvard University
Harvard Law School
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=391127
Paper ID: NBER Working Paper No. W9591
Date: March 2003
Contact: JONI HERSCH
Email: Mailto:jhersch@law.harvard.edu
Postal: Harvard University
Harvard Law School
Lewis 425
1563 Massachussetts Avenue
Cambridge, MA 02138 UNITED STATES
Phone: 617-495-2832
Fax: 617-495-3010
Paper Requests:
Full-Text downloads are available from SSRN Online for $5.
ABSTRACT:
How can workers have a voice in the face of declining
unionization and rising nontraditional career paths? To
demonstrate how a new labor market institution can emerge, I
develop a model of fundraising by a workers' organization in
which the founder must allocate resources between the provision
of public goods, which attracts foundation grants, and the
provision of private goods, which attracts individual members.
My case study for analyzing the performance of the model is
Working Today, a new organization founded with the objectives of
representing all workers and shifting employment rights from the
current employer-based regime to one that assigns rights to
individuals. Working Today has evolved from an organization
funded by foundation grants that attempted to represent all
workers, to primarily serving as an intermediary to provide
group health insurance for independent workers. In order to
examine the market for health insurance supplied by an
organization such as Working Today, I provide statistics on the
insurance coverage status and demographic characteristics of
non-standard workers and traditional employees.
JEL Classification: J00
______________________________
"The Effect of Private Insurance on Measures of Health: Evidence
from the Health and Retirement Study"
BY: AVI DOR
Case Western Reserve University
Weatherhead School of Management
National Bureau of Economic Research (NBER)
JOSEPH J. SUDANO
Case Western Reserve University
Center for Health Care Research and Policy
DAVID W. BAKER
Division of General Internal Medicine - Feinberg
School of Medicine of Northwestern University
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=416267
Paper ID: NBER Working Paper No. W9774
Date: June 2003
Contact: AVI DOR
Email: Mailto:AXD9@PO.CWRU.EDU
Postal: Case Western Reserve University
Weatherhead School of Management
10900 Euclid Ave.
Cleveland, OH 44106-7235 UNITED STATES
Phone: 216-368-4110
Co-Auth: JOSEPH J. SUDANO
Email: Mailto:jsudano@metrohealth.org
Postal: Case Western Reserve University
Center for Health Care Research and Policy
Rammelkamp 236A
2500 MetroHealth Drive
Cleveland, OH 44109 UNITED STATES
Co-Auth: DAVID W. BAKER
Email: Mailto:dwbaker@northwestern.edu
Postal: Division of General Internal Medicine - Feinberg School of
Medicine of Northwestern University
676 N St. Clair St.
Suite 200
Chicago, IL 60611 UNITED STATES
Paper Requests:
Full-Text downloads are available from SSRN Online for $5.
ABSTRACT:
In this paper we investigate whether the presence of private
insurance leads to improved health status. Using the Health and
Retirement study we focus on adults in late middle age who are
nearing entry into Medicare. Estimation addresses endogeneity of
the insurance participation decision in health outcome
regressions. Two models are tested, an instrumental variables
models, and a model with endogenous treatment effects due to
Heckman (1978). Insurance participation and health behaviors
enter with a lag to allow their effects to dissipate over time.
Separate regressions were run for groupings of chronic
conditions. We find that the overall impact of insurance on
health tends to be significantly downwards biased if no
adjustment for endogeneity is made. With corrections there is a
four-fold increase in the insurance effect; yielding a 7 percent
increase in the overall health measure for the uninsured.
Results are consistent across IV and treatment effects models,
and for all major groupings of medical conditions. Thus, the
effect of private insurance on health may be larger than
previously estimated. As for policy, expanding coverage to the
uninsured should result in substantial health improvement. By
conjecture, this is likely to reduce the need for health care
when individuals retire and enter Medicare, potentially leading
to savings.
JEL Classification: I11, I18
______________________________
"Cicio v. Does, 2003 U.S.App.LEXIS 2925 (2d Cir. 2/11/03) - Can
We Extricate Ourselves from the Supreme Court's Quagmire of ERISA
Remedies?"
BY: MARK D. DEBOFSKY
Daley, DeBofsky & Bryant
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=382680
Date: February 23, 2003
Contact: MARK D. DEBOFSKY
Email: Mailto:mdebofsky@ddbchicago.com
Postal: Daley, DeBofsky & Bryant
1 N. LaSalle St.
Suite 3800
Chicago, IL 60602 UNITED STATES
Phone: 312-372-5200
Fax: 312-372-2778
ABSTRACT:
The federal ERISA law (Employee Retirement Income Security Act)
has had significant impact on managed care litigation. The
recent appellate ruling in the case of Cicio v. Does, 2003
U.S.App.LEXIS 2925 (2d Cir. 2/11/03) illustrates the problems of
challenging the catastrophic consequences of a medical benefit
claim denial. Although the court found that the ERISA law did
not preempt a claim of medical negligence relating to a health
benefit plan's refusal to authorize a prescribed treatment, a
provocative dissent points out the real problem with these cases
is the federal courts' treatment of remedies available under the
ERISA law. Although the dissent suggests the need for a radical
reappraisal of the limits of the ERISA law, an argument is
presented as to why such remedies currently exist even under the
Supreme Court's jurisprudence on this issue.