MARK A. ROTHSTEIN, University of Louisville - Institute for Bioethics, Health Policy, and Law, University of Louisville - Louis D. Brandeis School of Law
Email: mark.rothstein@louisville.edu

We sought to determine whether workplace health risk reduction programs (HRRPs) using health risk assessments (HRAs), individually focused risk reduction, and financial incentives succeeded in improving employee health and reducing employer health benefit costs. Methods: We reviewed the proprietary HRA available to us and conducted a literature review to determine the efficacy of HRRPs using HRAs, individualized employee interventions, and financial incentives for employee participation. Results: There is some evidence that HRRPs in employer-sponsored programs improve measures of employee health, but the results of these studies are somewhat equivocal. Conclusion: Employer-sponsored HRRPs may have some benefits, but problems in plan design and in the studies assessing their efficacy complicate drawing conclusions. (J Occup Environ Med. 2009;51:943–950)

SAMUEL CARL SALGANIK, Columbia University School Of Law
Email: samsalganik@yahoo.com

Two recent circuit court decisions - first Retail Industry Leaders Ass’n v. Fielder in the Fourth Circuit then Golden Gate Restaurant Ass’n v. San Francisco in the Ninth Circuit - have left far from clear the extent to which state-level employer pay-or-play health insurance schemes are valid in the face of an ERISA preemption challenge. Debate indeed continues as to whether the currently operative, but as yet unchallenged, pay-or-play law in Massachusetts is preempted. The Ninth Circuit reasoned in Golden Gate that the San Francisco scheme it upheld was distinguishable from the Maryland scheme the Fourth Circuit struck down because it did not coerce employers into increasing their ERISA health benefits, and therefore the decision created no circuit split. This Note argues that a coercion-centered test is unlikely to produce a consistent doctrine. To make this point, it analogizes to the unconstitutional conditions doctrine, in which courts have also tried to measure the coercive effect of economic incentive schemes but have failed to fashion a coherent test capable of producing predictable outcomes. Instead of focusing on coercion, courts can, with equal fidelity to the law, apply a rebuttable presumption against preemption to pay-or-play schemes which are part of comprehensive health reform initiatives. This approach provides a superior basis for distinguishing the Maryland and San Francisco schemes, and also leads to the predictable outcome that the Massachusetts pay-or-play law is not preempted.

DAVID P. BERNSTEIN, affiliation not provided to SSRN
Email: spstat@yahoo.com

Current high-risk pools insure around 190,000 high-risk individuals at a total cost of around $9,400 per enrollee. Expanding high risk pools so they insure a total of one million individuals would necessitate raising an additional $7.6 billion in revenue through premiums, allocations on insurance firms, through government subsidies and other sources. A proposal under consideration by Congress would insure around 60,000 additional individuals. There are around 3.5 million people who are uninsured the entire year and cannot obtain private insurance because of health considerations. Health insurance plans offered by high-risk pools are generally too expensive for lower-income individuals. Efforts to reach lower-income individuals through high-risk pools would require larger subsidies, which would involve either more public funds or a reduction in the number of people insured. Current high-risk pools do not serve individuals who have offers of employer sponsored insurance (ESI) and will therefore not impact the price or availability of ESI from small firms.

LEEMORE S. DAFNY, Northwestern University - Department of Management & Strategy, National Bureau of Economic Research (NBER)
Email: l-dafny@kellogg.northwestern.edu
MARK DUGGAN, University of Maryland - Department of Economics, National Bureau of Economic Research (NBER)
Email: duggan@econ.bsos.umd.edu
SUBBU RAMANARAYANAN, University of California, Los Angeles - Policy Area
Email: subbu@anderson.ucla.edu

We examine whether and to what extent consolidation in the U.S. health insurance industry is leading to higher employer-sponsored insurance premiums. We make use of a proprietary, panel dataset of employer-sponsored healthplans enrolling over 10 million Americans annually between 1998 and 2006 to explore the relationship between premium growth and changes in market concentration. We exploit the differential impact of a large national merger of two insurance firms across local markets to estimate the causal effect of concentration on market-level premiums. We estimate real premiums increased by 2 percentage points (in a typical market) due to the rise in concentration during our study period. We also find evidence that consolidation facilitates the exercise of monopsonistic power vis a vis physicians, whose absolute employment and relative earnings decline in its wake.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

MONICA DAS, Skidmore College
Email: mdas@skidmore.edu
SANDWIP KUMAR DAS, Jawaharlal Nehru University
Email: skudas@hotmail.com

Health spending as a percentage of gross domestic product in the U.S. economy is growing, from 5% in 1960 to about 16% in the current period, and it is predicted to grow to as much as 30% in 2050. Then why is the supply of health care in the United States so insensitive to steeply rising prices? This paper conducts an econometric study to show that high health-care costs have an adverse impact on labor productivity, causing a negative production externality in all industries. So, can the rising cost of health-care affect the U.S. comparative advantage? The paper seeks answers to these questions in a general equilibrium model and finds that the labor productivity shock is responsible for the sluggish or declining supply of health care. Consumers are able to afford less health care due to a possible decline in real wages. U.S. comparative advantage becomes a nonissue, provided that the equilibrium is stable in spite of a negatively sloped health-care supply curve. Negative externality, leading to market failure, may be addressed in two alternative ways.

XIAOYONG ZHENG, North Carolina State University
Email: xzheng@ncsu.edu
DAVID M. ZIMMER, affiliation not provided to SSRN

Health-care utilization is estimated for different subpopulations with respect to various measures of health status, which allows the classification of health-care consumers into groups with different intensities of demand. This specification allows us to determine whether racial differences vary between subgroups of consumers. In addition to blacks, we also consider utilization by Hispanics. The model is estimated separately for five measures of utilization: office-based physician visits, office-based nonphysician visits, outpatient department visits, emergency room visits, and hospital discharges using data from the Medical Expenditure Panel Survey. Results across numerous specifications indicate that racial differences remain a serious public policy concern, both among healthy and unhealthy minorities.

DAVID G. BLANCHFLOWER, Dartmouth College - Department of Economics, National Bureau of Economic Research (NBER), Institute for the Study of Labor (IZA), Bank of England
Email: BLANCHFLOWER@DARTMOUTH.EDU

In this paper I examine the characteristics of adults who report on whether they have health care coverage and of people who say that they are unable to see a doctor over the preceding year because of the cost. I make use of a unique data set, the Behavioral Risk Factor Surveillance System, a phone survey undertaken in the United States for the years 2005-2009. I find evidence that not having the ability to see a doctor because of an inability to pay is a major and substantial source of unhappiness in the United States, even for people with high income.

TIMOTHY STOLTZFUS JOST, Washington and Lee University - School of Law
Email: JOSTT@WLU.EDU

Health insurance exchanges play an important role in pending health care reform legislation. This paper first examines the different ways in which exchanges could be designed in a reformed health care system and the different roles that they could play. The paper next briefly explores experience with exchanges and what we can learn from it. It then describes the different approaches taken by the three bills pending in Congress to exchange design and function. The following section examines the legal issues raised by exchanges as they are defined in the pending legislation. Finally, the paper concludes with policy recommendations as to how exchanges should be designed and function to play an effective role in a reformed health care system, noting in particular the strengths and weaknesses of the pending legislation.