HRW Welcomes Amy Catapano, Esq.

We are pleased to welcome Amy Catapano, Esq., to HRW. She is a health care attorney who recently completed her Masters of Law (LL.M.) in Health Law at Seton Hall Law. She received her Juris Doctor degree, graduating cum laude, from Seton Hall Law in 2007 and thereafter completed a clerkship in the Superior Court of New Jersey with the Honorable Barbara A. Curran in Hudson County. During law school, she was a member of the Journal of Sports & Entertainment Law, the St. Thomas More Society, and held an externship with the U.S. Securities and Exchange Commission. She is a graduate of the University of Michigan where she received a Bachelor of Arts in Spanish.

Ms. Catapano wrote her LL.M. thesis on the HITECH Act and data breach insurance. She is interested in health information technology, HIPAA and privacy law, and health care reform. She is licensed to practice in New Jersey and New York, and is a member of the NJSBA Health and Hospital Law Section and the NYSBA Health Law Section.  She has significant experience in medical malpractice litigation, as well as insurance defense and health law matters, having worked at a boutique defense firm in Milburn, New Jersey and in New York, New York.  She can be reached at amycatapano@gmail.com.

Reorganization of UMDNJ to be Implemented this Year

On January 25, 2012, after nearly a decade of deliberations and strategic planning, the University of Medicine and Dentistry of New Jersey Advisory Committee issued its Final Report pursuant to a directive from Governor Chris Christie. The Report calls for and explains a proposed reorganization and “complete overhaul” of the University of Medicine and Dentistry, which will most likely be known as the New Jersey Health Sciences University once the Committee’s recommended changes commence. The implementation of these changes are said to be of a high priority for the Christie  administration. UMDNJ is one of the largest public entities in the state, operating at an annual budget of $1.7 billion.

The Committee made the following recommendations, which have been endorsed by Governor  Christie:

• A revamped and recast health sciences university based in Newark, which they suggest be named the New Jersey Health Sciences University (NJHSU). This powerful academic institution, with significantly increased autonomy for three units — University Behavioral Health Care, the School of Osteopathic Medicine and the Public Health Research Institute — will establish the foundation for a new era of medical education and patient care in our State.

• An affirmative and strong endorsement of support for the critical mission and role of University Hospital for the Newark community and for the State. The Committee recognized the hospital’s vital role while also noting that its precarious fiscal position must be addressed. To that end they are recommending a public/private partnership that would provide for the improved operations and long-term sustainability of University Hospital.

• A broader, expanded research university in southern New Jersey comprised of the assets of Rowan University and Rutgers University in Camden and encompassing, as well, the Cooper Medical School of Rowan University.

• Reaffirms Committee’s interim recommendation for institutional realignment of UMDNJ’s Robert Wood Johnson Medical School, the School of Public Health and the Cancer Institute of New Jersey into Rutgers University.

The Report stresses the urgency of the action proposed, emphasizing, “The time is now.”

Medical education and health care delivery are– particularly as they relate to UMDNJ– enormously complicated, but not so complicated that decisive action on behalf of the State and for the State’s benefit should be put off any longer.

Pointedly, as U.S. attorney, Chris Christie “led a two-year federal takeover of the institution in 2005, after Medicaid fraud was discovered.” Governor Christie is reported as saying that mismanagement and the magnitude of  UMDNJ problems that have accumulated over the years have led him to believe that the structure and scope of UMDNJ, as is, can no longer be managed effectively.   As such, under the proposed plan the university will be broken down into component parts. Thinking that time is of the essence, Governor Christie has announced that the reorganization will take place this year.

Governor Christie has said that he recognizes that the University Hospital is indispensable to the well being of the people within the region. The Report proposes to place the management of the hospital under a long-term public-private partnership, with the hope that this will “[enable] continued high quality medical programs, increase efficiency in operations and investment in capital improvements in the future.”

Some Newark residents, however, are said to oppose the plan, citing fears that privatization and the splitting off of UMDNJ units will take away jobs and resources. In contrast, Governor Christie is said to believe that the initiatives will aid the state’s efforts to attract health care and biomedical companies, and avail the University of more funding opportunities. Further rationales for the Commission’s recommendations include the ability to quickly implement the institution’s research at the medical school to benefit patients and that the changes will add substantially to the infrastructure for pharmaceutical and biomedical research.

Newark Mayor Cory Booker, who is still reviewing the reorganization report, stated that he “welcome[s] sensible reform but I would stand shoulder to shoulder with other leaders to ensure our residents don’t suffer a decline in the quality and scope of available healthcare and that we maintain abundant medical education opportunities in North Jersey.”

ACO Symposium: Profesor Priscilla D. Keith to Present:The Impact of Accountable Care Organizations on Public Health

In conjunction with the Center for Health & Pharmaceutical Law & Policy, this year’s Seton Hall Law Review Symposium on October 28, 2011, will explore recent changes in the structure of health care delivery, in particular the rising popularity of Accountable Care Organizations (ACOs). For more information or to register, click here.

The keynote speaker will be Dr. Jeffrey Brenner, founder of the Camden Coalition of Healthcare Providers, and legal scholars and practitioners from around the country will present panel discussions on structural development, public health implications and lessons learned from state ACO programs. One such distinguished presenter is Priscilla Keith, Adjunct Professor and Director of Research and Projects, Hall Center for Law and Health, Indiana University School of Law — Indianapolis.

Professor Keith will take part in the panel concerned with “ACOs in Theory: Issues Raised by Integrated Delivery,” and will be presenting The Impact of Accountable Care Organizations on Public Health.

Priscilla D. Keith serves as Director of Research and Projects, as well as Adjunct Professor, at Indiana University Law School’s Hall Center for Law and Health. As Director, she manages the legal and policy research projects of the Center. She is also responsible for the development of the curriculum and other arrangements for the graduate law degree program (L.L.M.) in health law, policy and bioethics. Before returning to work for her alma mater, Keith served as the General Counsel of the Health & Hospital Corporation of Marion County, in Indianapolis, including Wishard Health Services, the Marion County Health Department, and Environmental Services. Her primary focus was litigation, corporate transactions, and risk management, and serving as the counsel for the Marion County Health Department’s Ryan White HIV AIDS Legal Project. Prior to her appointment as General Counsel, she served as Assistant Counsel to former Indiana Governor, Frank O’Bannon. She also served as an executive assistant to the Department of Insurance, State Board of Accounts, Utilities and Telecommunications, and the Women’s Commission. Additionally, Keith was Chief Counsel of the Advisory Section under Attorneys General Jeff Modisett and Karen Freeman-Wilson. Prior to her legal career, Keith worked for Eli Lilly and Company in discovery research, environmental and medical plans. She is a member of the American Bar Association’s Health Law Section, and serves on its Council, and is the Interest Group Leader. She also serves on the Board of Directors of the Providence Cristo Rey High School in Indianapolis, Visiting Nurses Service, the State of Indiana Ethics Commission and St. Mary’s Child Center. In addition to earning her J.D. from our law school, she holds an M.S. in Anatomy from Atlanta University, and a B.S. from Spelman College. She is admitted to the Indiana Bar.

Congratulations Jordan Cohen ‘11 and Katherine Freed Matos ‘11

Tonight just a fond farewell and congratulations to two of our finest student bloggers: Jordan Cohen and Katherine Freed Matos, both of whom have graduated from Seton Hall Law, with each receiving  the much vaunted  Health Law Award. They are both now hard at work studying for that fiendish quiz they offer each year at the end of July to see if would be lawyers were paying attention (it is a horrible exercise, I assure you, and if someone you know is studying for the Bar– bring them some food, and leave them alone– they’ll reemerge into the land of the living soon enough). As such, it will be awhile until we hear from them (at least on this blog) again.

After the Bar Exam, Jordan Cohen will be off to employ in the law offices of Brach Eichler, LLC., a preeminent law firm in the New Jersey metro area and a recognized leader in the field of healthcare law.

Katherine Matos has been named to the Office of the Inspector General at the U.S. Department of Health and Human Services, where she will work in the Office of Counsel to the Inspector General, Administrative and Civil Remedies Branch.

You will both be missed. It was a pleasure to work with you, and this blog is better for your having been here. Can’t thank you enough, or wish you enough luck– I expect great things– as it is simply the usual for you both.

Center News: Greater Newark Healthcare Coalition, Improving Care Through Collaboration

The Greater Newark Healthcare Coalition is now in its second year and continues to pursue cooperative projects to improve health care for the most vulnerable in the Greater Newark area. Professor John Jacobi serves as the Coalition’s board chair. Other members include a range of health providers, consumer groups, and government agencies. The projects include:

Case management of frequent utilizers of hospital emergency departments. These very fragile patients will benefit from a sophisticated evaluation of their needs and referral to appropriate community placements. Professor Jacobi and Research Fellow and Lecturer in Law Kate Greenwood are working with clinicians on this project, and will produce analysis supporting a reconfiguration of health care funding to both improve care and reduce costs.

Improved prenatal care. The Newark area has a disproportionate number of mothers with poor access to prenatal care.The Coalition is working to bring together various organizations to improve prenatal care.

Preparing physicians for new practice models. Accountable care organizations and patient- centered medical homes require the increased adoption of technology and physician practice patterns that mesh with demands for quality and efficiency. The Coalition will conduct training sessions for area physicians.

The Center’s faculty and students are engaged and committed to lending expert support to the Coalition through legislative and regulatory advocacy and policy development, believing that the fruits of health reform will reach the most vulnerable only if providers, advocates, and regulators work together in cities like Newark.

And the Winners Are…

Two promising health law students were recently awarded scholarships to attend Seton Hall Law’s Healthcare Compliance Certification Program this June. The program immerses attendees in the laws, regulations, industry codes and compliance standards applicable to the life sciences industry. This year, the scholarships, which are given annually, were awarded to Jenna Smith, a 2L at Loyola University Chicago School of Law, and Abraham Gitterman, a 2L at the University of Maryland School of Law.

For more information on the scholarships and on how students may apply for next year, click here (and scroll down past “Government Scholarships”).

A Biography of Cancer and Other Interesting Interviews

As I’m sure the great majority of our readers don’t get the regular joy of hearing Leonard Lopate at NPR’s WNYC, I thought I’d offer up these recent archive interviews for your pleasure and/or edification. Lopate’s interviews are generally extraordinary– and these are no different, except perhaps even better than the norm.

This is how they describe the show– recent favorite interviews– on the WNYC website:

Oncologist Siddhartha Mukherjee discusses his deeply personal biography of what he calls “the emperor of all maladies:” cancer. Yvonne Thornton talks about her long road to become the first African American woman board certified in the obstetrical sub-specialty of maternal-fetal medicine. Douglas Starr tells the true crime story that led to the birth of forensic medicine. And Anand Giridharadas gives us an intimate portrait of India’s remaking.

Enjoy.

Health Care and You.org, Simply Well Done

There’s a new resource in town– and it’s both informative and refreshingly easy to use. It’s called healthcareandyou.org and it allows a user to click on their state, and find out what the health reform law means to them– personally. By clicking on New Jersey, I got this:

What You Need to Know About Health Care in New Jersey

• In 2011, those in the Medicare Part D “doughnut hole” will automatically receive a 50 percent discount on certain name-brand drugs and a 7 percent discount on generic drugs.
• Young adults up to age 26 can now stay on their parent’s health plan.
• NJ Protect is available for adults who have been uninsured for at least 6 months and have been denied coverage because of a pre-existing condition. Also, children up to age 19 can’t be denied coverage because of pre-existing conditions. (By 2014, insurance companies will not be able to deny coverage to anyone with pre-existing conditions.)
• Some small businesses can get tax credits to help pay for the cost of covering their employees.
• Insurance companies can’t put dollar limits on the care that is covered in your lifetime.

It will also allow further refinement by under/over 65 years old and small business owner– tailoring the pertinent information accordingly. Beyond that, the glossary is a major league help.There’s also an implementation timeline.

In case you were wondering, the site is the result of a partnership among AARP, American Academy of Family Physicians, American Cancer Society, American College of Physicians, The American Medical Association (AMA), American Nurses Association, Catholic Health Association of the United States, and the National Community Pharmacists Association.

In addition to the link in this post, the site will be listed on this blog going forward in Resources. It simply is.

New Jersey’s Commissioner of Health and Senior Services Discusses Medical Marijuana and Two Other Regulatory “Case Studies” at Seton Hall Law

On Tuesday, March 1, 2011, New Jersey’s Commissioner of Health and Senior Services Dr. Poonam Alaigh gave a lively and illuminating talk to an audience from within and outside the Seton Hall Law School community.  Reflecting her medical training, Dr. Alaigh organized her talk around three “case studies”: (1) the implementation of the New Jersey Compassionate Use Medical Marijuana Act; (2) the rulemaking procedure to amend the hospital licensing standards relating to nurse anesthetists; and (3) the decision by the Department of Health and Senior Services to defer implementation of New Jersey’s menu-labeling law.  Two central themes of Dr. Alaigh’s presentation were the remarkable complexity of the legislative and rulemaking processes and the importance of a patient-centered approach to healthcare regulation.

The bulk of Dr. Alaigh’s presentation addressed the unusually extensive back-and-forth between the Department and the Legislature that has characterized the implementation of New Jersey’s medical marijuana law.  After the New Jersey Senate invalidated the Department’s initial set of draft regulations, on the grounds that they “would not comply with the intent of the law and would make it much too difficult for eligible patients to access relief through marijuana,” the Department promulgated a revised set of draft regulations reflecting the terms of a bi-partisan compromise.  Dr. Alaigh described the massive effort she and her staff — at times, she said, her entire staff — have made to educate themselves about both the science supporting the use of marijuana for medical purposes and the experience of other states with medical marijuana laws.  Dr. Alaigh believes the result of the Department’s hard work is a regulatory regime that serves patients in need while avoiding the fraud and criminal diversion problems experienced in California and Colorado.  She described New Jersey’s medical marijuana program as the “gold standard” and said that the Department has fielded calls from officials in other states interested in adopting something similar.  Among the unique elements of New Jersey’s program is a registry of de-identified patient treatment and outcomes data that will allow researchers to learn more about marijuana’s safety and efficacy.

Dr. Alaigh also spoke about the Department’s rulemaking amending the hospital licensing standards relating to nurse anesthetists.  On the one hand, Dr. Alaigh explained, nurse anesthetists are advanced practice nurses who by statute do not require the supervision of a doctor.  On the other hand, Dr. Alaigh knows from practice how quickly a patient’s condition can turn critical while under anesthesia.  The final regulation provides that nurse anesthetists can administer anesthesia in a hospital setting in accordance with a joint protocol that ensures that an anesthesiologist (1) is available at all times for consultation and (2) is physically present “during induction, emergence and critical change in status.”  Dr. Alaigh noted that this result was not likely to have made either anesthesiologists or nurse anesthetists happy.  A sign of success for a regulator, perhaps?

The third and final case study that Dr. Alaigh discussed was the Department’s decision not to promulgate draft regulations implementing New Jersey’s menu-labeling law and instead to wait for the federal Food & Drug Administration to implement the menu-labeling provisions of the Patient Protection and Affordable Care Act.  As Dr. Alaigh explained in a post on her blog, “[p]ausing to see what the FDA proposes in nine weeks is reasonable.  It avoids unnecessary duplication and costs for restaurant owners who would have to invest in new menus and then redo them when the federal rules supersede the state law.”  That’s right, Dr. Alaigh has a blog, NJ Health Beat.  You can keep up with her here.

The Individual Mandate, a Brief History — Part II, The Republican Alternative (1993-1994)

When President Clinton announced his “Task Force on National Health Reform” in late January, 1993, Republicans (at least initially) felt the need to offer voters a conservative counterpoint. Their primary concern was countering the “employer mandate” proposals, which the right has long opposed as a job-killer. The stakes were raised when, for various reasons, the Task Force’s activities became a political liability for the new President. (The PBS Newshour’s website provides a useful timeline for the entire “Hillarycare” fiasco.)

Politicians on both sides recognized many of the same problems with American health insurance. But without employer mandates or government-run plans at their disposal, Republicans needed a more direct means of containing the cost of health coverage and protecting the insured from “free riders.”

Solutions from the Pauly and Heritage plans soon found their way into Republican- and Democrat-sponsored health bills-including the individual mandate that was vital to both. Lately, liberal pundits have been pushing this fact as some great dramatic irony: Republicans, some of whom are still in office today, loved the mandate back when it was an alternative to President Clinton’s proposals.

That’s a bit of an exaggeration. However much Republicans liked it, conservative legislators wanted to focus on how their bills would enable individuals to choose the insurance they wanted, rather than the consequences for failing to do so.

The “Health Equity and Access Reform Today Act of 1993,” sponsored by Republican Senator John Chafee, was probably the most thorough proposal of the bunch, and even enjoyed some bipartisan support. As has been noted, the bill shared several common elements with the ACA, and would have required all citizens and resident aliens to possess qualifying health coverage by 2005. (This is also the only bill I know of to call this requirement an “individual mandate.”)

Like the ACA, but unlike the think-tank plans or competing Republican proposals, the Chafee bill excludes those with religious objections from the mandate. This proposal didn’t so much enforce the mandate as attempt to make compliance financially attractive-only by possessing qualifying coverage could one take advantage of increased tax credits.

One rejoinder to this history lesson is that two bills without mandates, Representative Rick Santorum and Senator Phil Gramm’s “Comprehensive Family Health Access And Savings Act” and Representative Cliff Stearns and Senator Don Nickels’s “Consumer Choice Health Security Act”, were both more popular among Republicans than the Chafee bill. This is true insofar as neither bill contained a specific provision requiring Americans possess health coverage, but untrue in every other respect.

Based on the Heritage plan, the Stearns-Nickels bill terminated the employer health plan exclusion, and the medical expense and self-employed health insurance deductions. The tax credits and other benefits designed to defray the cost of health care expenses were withheld from those who failed to possess “federally qualified” coverage, as were both itemized health care deductions and even standardized deductions. The Consumer Choice Act would also have followed through with a version of the think tank proposals’ enforcement mechanism, creating state programs to provide coverage “to any individual who . . . who refuses to voluntarily purchase such insurance coverage privately.”^[1]

As with other 1990s reform bills, the Consumer Choice Act didn’t devote a specific provision to spelling out an individual mandate; yet no less an authority than the Heritage Foundation considered the bill to possess an individual mandate as per their own design. Soon after the introduction of Nickels-Stearns, Heritage scholar and conservative health care guru Robert E. Moffitt delivered an eloquent and  detailed apologetic in its support. Moffitt’s reasoning would be echoed, years later, in the Government’s own defense of ACA § 1501(b).

The Santorum-Gramm bill was, at once, more draconian and less detailed than any competing proposal. Title VI of that bill stated that “Any individual with family income exceeding [100%] of the official poverty line^[2] . . . but who fails to purchase [the required] coverage . . . within 1 year of the date of the enactment of this Act, shall not be eligible for the insurance pool program under title V of this Act.” Title V established subsidized insurance pools for those with pre-existing conditions. In addition, “No provision of Federal, State, or local law shall apply that prohibits the use of any statutory procedure for the collection of unpaid debts for medical expenses incurred by [these] individuals . . . .”

In other words, under Senator Gramm’s plan, not only would you suffer the same tax disadvantages in the similarly-structured Stearns bill, but noncompliance at any point apparently nullifies whatever bankruptcy protections that would help relieve medical debt. The uninsured and underinsured would also risk the possibility that a health condition would price you out of health coverage for either a year or until you aged into Medicare (the bill is unclear as to which). That may be a valid exercise of the commerce power, but it’s also begging a closer look at the Eighth Amendment’s use of the phrase “cruel and unusual.”

There were a few conservative and libertarian criticisms of these mandate proposals, but they were comparatively tame to what we hear now. Nobody seemed to consider the individual mandate a constitutional problem of any kind.^[3] The main concern about Stearns-Nickels, it seems, was not that it required states to forcibly insure hold-outs, but that it permitted (but did not require) this by way of state-run plans. At a March, 1994, Heritage Foundation meeting, Senator Nickels promised to delete the provision. But neither Nickels nor Representative Stearns ever altered it.^[4]

This disinterest continued even after Democrats reintroduced the “Health Security Act” in July, 1994. That bill had an express individual mandate, was authored by liberal superhero Ted Kennedy, and would have issued Americans spooky-sounding “Health Security Cards.” Amazingly, at the height of Newt Gingrich’s revolution against government overreach, not a constitutional concern seems to have been raised.

At any rate, all Republican bills were left for dead by the end of 1994. Various forces (including Bill Kristol’s infamous memo) convinced the party that any compromise on health care reform would be good for President Clinton and thus bad for them. Colorado senator Hank Brown went so far as to rescind his co-sponsorship of the Chafee bill a month before the midterm election. The problem wasn’t the individual mandate, itself, but its incompatibility with the new message: there wasn’t a health care crisis in America to begin with.

[Read "The Individual Mandate a Brief History--Part I, Conservative Origins"]

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^[1] Stearns-Nickels § 131(b).

^[2] Note, the original text reads “exceeding 200 percent of the income official poverty line . . . or who is eligible for a partial or full credit to purchase a catastrophic health insurance plan under such section.”  Said tax credits are calculated as “100 percent reduced (but not below zero percent) by 1 percentage point for each 1 percentage point (or portion thereof) the qualified individual’s family income exceeds 100 percent of the income official poverty line . . . .”  Thus, if your income is 101% or greater, you’re subject to the bill’s penalties.

^[3] William Saffire, Let’s Make a Deal on Health, N.Y. Times (May 23, 1994) (available online at http://select.nytimes.com/gst/abstract.html?res=F00713FC355C0C708EDDAC0894DC494D81&scp=10&sq=safire%20health%20care%20let’s%20make%20a%20deal&st=cse); Michael D. Tanner, Health Care Reform: The Good, the Bad, and the Ugly, Cato Institute Policy Analysis No. 184 (Nov. 24, 1992) (available online at http://www.cato.org/pubs/pas/pa184.pdf); Miller, supra.

^[4] Tom Miller, Nickles-Stearns Is Not the Market Choice for Health Care Reform, Cato Institute Policy Analysis No. 210 (June 13, 1994) (available online at http://www.cato.org/pubs/pas/pa210.pdf).

Happy Birthday HRW

Today marked two years for Health Reform Watch on this site, and  I just wanted to say thank you to all our readers and contributors and to The Center for Health & Pharmaceutical Law & Policy here at Seton Hall Law for making it possible. We strive to give the reader not a comprehensive view, but a series of views sprung from some of the finer legal minds this country has to offer. It seems to be working.

The health law and reform community is not an especially large population, but the ramifications of health reform (or the lack thereof) have shown themselves over the course of these last two years to be staggeringly large.  I’m pleased to say that this blog just surpassed 360,000 visits, over 275,000 since the start of 2010. But that doesn’t count the views of our numerous posts syndicated to The Health Care Blog, nor the excerpts published in the New York Times or Washington Post, etc. And as we as a country attempt to come to terms with the direction in which health care is heading, I’m pleased to say that our Guide to Accountable Care Organizations, published last March, has been linked almost everywhere and, for most days last year, and until recently (Damn, NPR), enjoyed being the  number one google search in America for  “Accountable Care Organizations.”  I’d like to think we’ve helped lead towards clarity.

The list of news organizations, blogs, think tanks, politicians and medical/legal journals which have cited HRW in these two short years is something we are very proud of (and something, upper right hand corner, which I need to update) : it means that we, from the environs of legal academia, have helped put that academic view into the popular debate in a time when to do so may be most constructive. And because a spoon full of sugar makes the medicine go down, we hope being informative has been at least somewhat entertaining.

In the year to come, we hope to continue to bring to the table the  insights of  thought leaders across the spectrum of health & pharmaceutical law & policy– and spur informed debate. Because quite simply, when it comes to health care reform

Since it costs such a lot to win, and even more to lose,
You and me bound to spend some time wonderin’ what to choose.
–J. Garcia

The Individual Mandate, a Brief History — Part I, Conservative Origins

In recent years, politicians of every stripe have eaten their words about the wisdom of requiring all Americans to possess health coverage. This hasn’t been real news since the 2007 Democratic primary debates, when candidate Obama claimed his reasons for opposing the mandate were similar to those expressed by Hillary some 15 years ago.

A few years later it was President Obama’s turn. And by 2010, the entire Republican party performed a synchronized heel-face turn, virulently opposing the solution they advocated decades earlier. All of this culminated with the recent passage of the “Repealing the Job-Killing Health Care Law Act” in the House, by which point the mandate had become a 21st century Intolerable Act.

The media have dutifully reported each foible as if such strategic backpedaling were something new under the sun. But the 22-year path to ACA § 1501(b) is a story in its own right, a sort of philosophical history of American health reform policy.

The think-tank solutions (1989 - 1992)

Back in the late 1980s, the individual mandate wasn’t controversial at all–just another idea being kicked around in conservative think tanks. Although economist Mark V. Pauly, an adviser to the first Bush administration, is often cited as the mandate’s creator, conservative thinkers Stuart M. Butler and Edmund F. Haislmaier were dreaming up similar proposals at the Heritage Foundation as early as 1989.

While Democrats debated the choice between employer mandates and single-payer, Pauly and other conservatives looked for market-based remedies to what all agreed was a national “health care crisis.”  The problem with the health insurance market was that it operated more or less like normal accident insurance. As Butler once framed it:

If a young man wrecks his Porsche and has not had the foresight to obtain insurance . . . society feels no obligation to repair his car. But health care is different. If a man is struck down by a heart attack in the street, Americans will care for him whether or not he has insurance. If we find that he has spent his money on other things rather than insurance, we may be angry but we will not deny him services . . . .

A mandate on individuals recognizes this implicit contract. . . . [E]ach household has the obligation, to the extent it is able, to avoid placing demands on society by protecting itself.^[1]

Like the ACA, Butler’s proposed mandate operated through the tax code, using tax credits to make individual insurance more affordable for those who needed the help. Butler’s idea was to replace the tax exclusion for “company-based” plans with above-the-line tax credits: Butler’s plan gave a 20% tax credit to anyone with a health plan meeting basic coverage requirements, along with a “steeply rising” credit for out-of-pocket expenses in relation to household income.^[2]

Later versions of the Heritage plan went further and actively discouraged employer-run plans by turning them into normal health plans, subject to the same proposed federal requirements–including the requirement to accept any applicant, employee or not.^[3] Butler disliked the income exclusion because it was, first of all, unfair to those who had to purchase their own plans; the exclusion also perpetuated what he felt was an arbitrary emphasis on health insurance as an employment benefit. So long as insurers could deny applicants with preexisting conditions, the employer-centric status quo also discouraged workers from switching jobs–a concern eventually answered by HIPAA in 1996.

Butler predicted that people would gradually leave their employer plans for small groups, such as union-administered plans, Farm Bureau plans, and local HMOs. The small groups, bolstered by the formerly uninsured now required by law to join, would gain bargaining power with size. The higher premiums of those with preexisting conditions were answered with larger tax credits and state-operated subsidized high-risk pools, while low risk individuals enjoyed the benefits of fierce competition between plans intended for their lucrative demographic.^[4]

Mark Pauly’s individual mandate operated much like the Heritage plan’s, but served a slightly different reform scheme. Pauly, too, would cease exempting the value of employer-provided health benefits from taxable income, although self-insured employers could otherwise continue to operate much as they do now. There were other differences, such as the Pauly plan’s less generous tax credit system; but the individual mandate played essentially the same market-stuffing role in both proposals.^[5]

The primary difference between these conservative think tank mandates and the ACA is how they are enforced. Under the Pauly and Heritage proposals, you simply would possess whatever minimum coverage the federal government required. The 1992 version tasked state programs with randomly assigning the voluntarily uninsured to existing plans.^[6] This is considerably more invasive than the ACA:  following the lapse of the three-month grace period, failure to comply with the mandate results in a “personal responsibility payment,” but no actual health coverage.

In 2011, the Pauly and Heritage plans seem surprisingly bold. Such an abrupt shift from the employer-provided model would likely have been more difficult and costly than either Heritage or Pauly let on. For example, the CBO predicted doing so would slow future wage growth for many workers.^[7] But, at least in theory, the shift would benefit many low-income households, which would receive the same insurance tax credit everyone else did. And for the young invincibles, the proposed out-of-pocket deductions would make the lower-premium, higher out-of-pocket plans less risky.

These proposals met with few questions about government power, federalism, or individual liberties. Years later, Heritage scholar Robert E. Moffitt hammered libertarian critics for ignoring the disastrous economic effects of “free riders” on responsible citizens by focusing on “metaphysical abstractions.”

“An individual mandate for insurance, then, is not simply to assure other people protection from the ravages of a serious illness, however socially desirable that may be; it is also to protect ourselves. Such self protection is justified within the context of individual freedom; the precedent for this view can be traced to none other than John Stuart Mill. It does not necessarily follow, however, that we would have a right to prescribe anything beyond our own self-protection.”^[8]

Still, any legislation adopting the think tank mandates would need to smooth out their harsher aspects-e.g., they’d need exclusions for religious objectors and extreme hardships. But these proposals were realistic, enforceable, and rooted in a genuinely conservative emphasis on personal responsibility.

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^[1] Start M. Butler, Assuring Affordable Health Care for All Americans, Heritage Lectures 218, p. 8(1989).

^[2] Butler, supra, at 4, 6.

^[3] A Qualitative Analysis of the Heritage Foundation and Pauly Group Proposals to Restructure the Health Insurance System (”CBO Analysis”), CBO Memorandum, p. 4 (April 1994) (available online at http://www.cbo.gov/ftpdocs/48xx/doc4896/doc23.pdf).

^[4] Butler, supra, at 5-7.

^[5] CBO Analysis, supra, at 17-23.

^[6] Stuart M. Butler, A Policy Maker’s Guide to the Health Care Crisis Part II: The Heritage Consumer Plan (”Guide Part II”), Heritage Talking Points, p. 12 (1992) (available online at http://s3.amazonaws.com/thf_media/1992/pdf/APolicyMakers%20GuidetoTheHealthCareCrisisPart2-S%20Butler.pdf).

^[7] CBO Analysis, supra, at 22.

^[8] Robert E. Moffit, Perspectives: Personal Freedom, Respnsibility, and Mandates, 13 Health Affairs 101, 103-4 (1994) (available online at http://content.healthaffairs.org/content/13/2/101.full.pdf+html).

Center Works on Pilot to Improve Access to Critical Community Services in Newark, NJ

.The Greater Newark Healthcare Coalition is a new nonprofit comprising Newark’s hospitals, Federally Qualified Health Centers, primary physicians, and many community groups, as well as city and state government representatives, gathered to improve access to care for the region’s most vulnerable populations. Professor John Jacobi, Faculty Director of the Center for Health & Pharmaceutical Law & Policy and Dorothea Dix Professor of Health Law & Policy, serves as the Coalition’s board chair.  The Coalition has already spun off a Health Information Exchange, and is engaged in a number of exciting pilot projects.

One project will address the community care needs of very high utilizers of hospital emergency department services.  The Coalition plans to indentify an initial cohort of frequent users and provide them with intensive case management with the goal of matching them with appropriate, community-based services. This approach has been shown in other states to both improve the lives of frequent users and reduce unnecessary hospital visits.

Professor Jacobi and Research Fellow Kate Greenwood will analyze the role of existing laws and policies in either facilitating or frustrating the Coalition’s efforts. They hypothesize that while funding flows (relatively) freely to hospital emergency departments because of the legal entitlement to care in that setting, these funds will not readily follow frequent users as they seek community health and social services better suited to their needs.  They hope to assist state and regional policymakers and service providers in their efforts to reform the funding and delivery mechanisms to better meet the needs of this very vulnerable population.

Sunlight is a Weak Disinfectant

One of the most robust “memes” in contemporary law is the power of disclosure. In health law, disclosure comes up again and again: patients need to give “informed” consent, insurers are supposed to explain their policies clearly, and conflicts of interest, when not proscribed, should at the very least be exposed. But there are growing challenges to the disclosure meme, both within health law and without.

George Lowenstein and Peter Ubel note some problems with disclosure approaches in this article on the weaknesses of behavioral economics generally:

It seems that every week a new book or major newspaper article appears showing that irrational decision-making helped cause the housing bubble or the rise in health care costs. Such insights draw on behavioral economics, an increasingly popular field that incorporates elements from psychology to explain why people make seemingly irrational decisions, at least according to traditional economic theory and its emphasis on rational choice. . . . But the field has its limits. As policymakers use it to devise programs, it’s becoming clear that behavioral economics is being asked to solve problems it wasn’t meant to address.

[T]ake conflicts of interest in medicine. Despite volumes of research showing that pharmaceutical industry gifts distort decisions by doctors, the medical establishment has not mustered the will to bar such thinly disguised bribes, and the health care reform act fails to outlaw them. Instead, much like food labeling, the act includes “sunshine” provisions that will simply make information about these gifts available to the public. We have shifted the burden from industry, which has the power to change the way it does business, to the relatively uninformed and powerless consumer.

The same pattern can be seen in health care reform itself. The act promises to achieve the admirable goal of insuring most Americans, yet it fails to address the more fundamental problem of health care costs. . . . [T]he act tries to lower costs by promoting incentive programs that reward healthy behaviors. . . . [But s]tudies show that preventive medicine, even when it works, rarely saves money.

At its worst, disclosure can become merely pro forma; as Kafka (via Trudo Lemmens) puts it, “Leopards break into the temple and drink to the dregs what is in the sacrificial pitchers; this is repeated over and over again; finally it can be calculated in advance, and it becomes part of the ceremony.” Omri Ben-Shahar has argued that disclosure is one of many aspects of consumer protection law with little real impact on individual welfare. As Amelia Flood reports,

Ben-Shahar, who spent last summer studying all the mandated disclosure statutes in Illinois, Michigan and California, argues that consumer protection advocates have gotten it wrong when it comes to mandating information access for consumers. He says consumers get lost in a sea of technical language, unread disclaimers and long-shot lawsuits. . . . According to Ben-Shahar, disclosures are of more use to consumer ratings groups like Zagat and Consumer’s Digest than they are to most consumers.

So perhaps there is some hope here: third-party aggregators and raters might use disclosures as part of an overall effort to rate various hospitals or doctors. The question then becomes–who shall pay (and rate) the raters? One irony here is that doctor rating sites have themselves been accused of being insufficiently transparent about the ways in which they evaluate physicians. New York Attorney General Cuomo even pursued the matter. His office eventually settled with insurers who ran rating sites. They pledged to “fully disclose to consumers and physicians all aspects of their ranking system.”

What’s the lesson here? First, that consumers are, by and large, too busy to process piecemeal disclosures by professionals like physicians and other health care providers. Second, third party raters can fill some of this information gap by aggregating information. Third, this process of aggregation and rating itself will likely need to be closely supervised by a good-faith regulator, lest it fail to take into account the full range of interests (and quality of information) proper for the task.

Alliance for Health Issues Major Resource, “Covering Health Issues”

Amazing resource for health care and health care reform info over at Alliance for Health, “Covering Health Issues, 5th Edition, 2010 Update.” Made possible by the Robert Wood Johnson Foundation, it has 12 chapters and covers such issues as Health Reform, Cost of Health Care, Quality of Care, Mental Health & Substance Abuse, Long-Term Care, and Disparities. The collection is a veritable treasure trove of information presented in a readily accessible manner. Though the phrase is lacking because access is free, the Fast Facts alone are worth the price of admission. A few to think about (footnotes omitted):

• Two-thirds of people age 65 today will need some long-term care in their lifetimes.

• An estimated 22.3 million people were classified as substance dependent or substance abusers in 2007. Substances abused range from alcohol, pain relievers and tranquilizers to hallucinogens, cocaine and heroin.

• Each year, about one in four adults (26.2 percent) suffers from a diagnosable mental illness, according to National Institute of Mental Health.

• In a ranking of 19 industrialized countries, the U.S. had the highest number of unnecessary deaths.

• Among 37 nations, the U.S ranks 29th in terms of infant mortality with nearly twice as many infant deaths per capita than France.

• The United States spent $2.3 trillion on health care in 2008, or $7,681 per person. This amounted to 16.2 percent of the nation’s gross domestic product (GDP).

• Health care costs more than tripled from 1990 to 2008,² and are projected to rise to 19.3 percent of GDP in 2019.

• Nearly 82 percent of the uninsured in 2009 lived in families headed by workers.

• In 2008, 17.2 percent of full-time employees and 25.5 percent of part-time employees age 19-64 were uninsured all year.

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