Health Law Furrow

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Health Law
Authors Barry Furrow
Thomas Greaney
Sandra Johnson
Timothy Jost
Robert Schwartz
Brietta Clark
Erin Fuse Brown
Text Image of Health Law: Cases, Materials and Problems, 7th (American Casebook Series)
Health Law: Cases, Materials and Problems, 7th (American Casebook Series)
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Contents

1. Health law -Chapter 1 Cost, Quality, access, and Choice[edit]

A. Cost[edit]

  • Encompasses actual health-related expenses, such as amounts individuals pay out of pocket for medical services and products, and for those who are insured, premiums paid for health insurance.
  • Cost to employers and taxpayers for providing funding and operating public insurance programs.
    • o Veterans Administration hospital and clinics
    • o State hospitals
    • o Other public health care programs and providers
  • Systematic cost of uncompensated health care – leading to higher health care prices and indirectly through consumer bankruptcies
  • Cost of unnecessary care, which increases utilization, drives up the cost of insurance and increases the incidence of iatrogenic (relating to illness caused by medical examination or treatment) injuries that generate still more cost
  • On the other hand, cost goes much further than actual expenses, encompassing the cost of health care that is not received when needed. Sick or injured individuals who forgo needed care incur personal cost when:
    • They lose income from missed work days
    • Lost productivity imposes cost on their employers and co-workers
    • Contagious diseases when untreated will spread to others, causing additional missed days of work and school
    • Diseases treated unthoroughly will impose non-financial cost (social life, family life)
    • Under-treated, ill-health becomes significant at a population level, causing cost not categorized as ‘health care costs’:
      • o Uncompensated caregiving by family members, friends, equipment, support and services necessary in order to maintain function and independent living
    • Recognizes that the concept of cost as used here recognizes that, as a matter of personal and public well-being, there are monetary and non-monetary costs for ill-health and for health care.

B. quality[edit]

  • Implicated by efforts to preserve health and, when illness or injury occurs, to restore health safely and effectively through the work of health care professionals, institutions, and integrated delivery systems.
    • o Example: The quality of care a patient receives is determined not only by the professionalism of her physician or other medical professional, but also by the ability of the tax payer network and the clinic or hospital through which her physician practices to organize all aspects of the delivery of that patient’s care
  • Quality is increasingly important as a measurable outcome that can be used by patients, policymakers, and payers to evaluate providers, institutions, and systems
  • Preventing ill-health and, when necessary, restoring health depend not only on private health care providers, but also in public systems.
    • o Medical and Medicare assure levels of provider quality
    • o Drug and devices are safe, effective, and unadulterated
    • o State and Federal public health systems that track infectious diseases, require certain food labels, inspect grocery stores, restaurants, and monitor drinking waters, all to prevent illness and injuries and responding to health problems at population levels

C. Access[edit]

  • Addresses inequity (lack of fairness) related to health and health care. It describes the problem that many Americans experience obtaining health care because they cannot afford to pay for care or because they cannot find quality providers willing and able to provide care
  • 27.3 million Americans who remained uninsured at the end of 2016
  • Those without private insurance and who are not eligible for Medicare or Medicaid lack reliable means to pay for health care services, leading to poorer health because they are not able to obtain preventative care or care for chronic conditions
  • The uninsured are significantly more likely to have low incomes, which means that any medical services they receive are likely to result in bills that create a financial crisis
  • The concept of “access” casts a wide net across health law and policy and addresses obstacles beyond ability to pay
  • Concerns over access include issues as disparate (essentially different in kind; not allowing comparison) as the absence of accessible medical and diagnostic equipment for treating patients with
    • o Physical disability
    • o Lack of providers in rural areas
    • o Conscience-based refusal by providers regarding particular health care services when those providers dominate available services
  • Along with “quality”, access draws attention to patterns of unequal access and treatment experienced by disadvantaged groups, and discrimination on the basis of race, gender, disability, and other characteristics across the health care system
  • Inequities (Lack of fairness) in the social conditions that affect population health, including the fact that those in poverty are significantly less likely to enjoy clean air and drinking water, safe outdoor spaces for exercise, and reasonable proximity to a health care provider or to a source of purchasing healthy food

D. choice[edit]

  • Acknowledges that respect for persons is uniquely important in relation to health and health care.
  • Individuals can experience profound vulnerability as a result of ill-health and as a result for paying for medical care to restore and maintain care
  • Choice is associated with respect for patients by health care providers and is reflected in the laws of informed consent and confidentiality among others
  • In the midst of an emergency, requires the cooperation of the individuals within the population at risk
  • Laws affecting providers network can expand or limit a patient’s choice of physician
  • An individual’s choice of health plan is implicated by subsidies and exchanges created by the Federal Law and coverages mandated by the law
  • A patient’s treatment choices are also restricted by regulations that prohibit unproven drugs from entering the market or by insurance contracts that exclude coverage for alternative therapy

E. conclusion[edit]

  • These four concerns operate in a dynamic and complex relationship
  • Increased quality does not naturally increase cost
  • Increased staff-to-patient ratio in health care facilities does not necessarily increase the cost of care
  • Impact of health care cost is not caused by the increasing number of individuals eligible for or the range of services covered by Medicaid or Medicare, or public programs covering for the elderly, disabled, and the poor.
  • It is possible that total cost actually is lowered by avoiding facility-generated injuries or infections or by providing timely care that avoids extraordinary costs incurred as a medical condition or disease moves to later stages untreated
  • Preserving individual choice through maintaining the private health insurance, will most likely increase costs overall, but perhaps the increase in cost is justified
  • Political strength, economic power, and culture and tradition all influence how we view the relative advantages and disadvantages of particular proposals and how we ultimately design our system
  • In the end, cost, quality, access, and choice are derived from a defining reality that health is a fundamental human need
  • Without it, economies stall, social and democratic structures are strained, and the lives of at least some individuals are up-ended (upside down)
  • In this very broad sense, health law has dual normative goals: justice and protection of health

F. Protection and affordable care act (ACA)[edit]

  • Centers on the tentative adoption of the principle that providing access to some form of basic medical care is important to the health and flourishing og society as a whole
  • Individual choice- “No one will make you change your coverage; if you like it, you can keep it.”
  • The goal is to develop a system that provides higher quality health care to more people at a lower cost

G. II justice and equity[edit]

  • Three themes merit special attention:
  • First, the vigorous discussion and debate around the ACA put a powerful spotlight on the values and principles underlying the allocation of health care resources and costs within the U.S health care system
    • For example: Decisions regarding the retrieval and allocation of scarce human organs for transplantation
  • Ethical and legal analysis of the distribution of health care typically begins with addressing one question: whether health care is distinguishable from other goods and services that are governed by market transaction
  • Second, concepts of justice demand attention to discrimination in the health care system
  • Individual and structural discrimination continue to play a significant role.
  • Discrimination has shaped out health care system
    • o S hospitals and other health care facilities were segregated by law well into the late 1960s and custom for some time after
    • o Well into the 1990s, individuals with disabilities were subject to unnecessary institutionalization, often under inhumane conditions, as a form of “treatment” for a wide range of physical and mental disabilities
  • There are now federal laws that prohibits discrimination in health insurance, health care, or both on the bases of race, color, national origin, disability, genetic information, and gender
  • The traditional approach of federal anti-discrimination law is to prohibit discrimination based on specific characteristics of an individual
    • o Those characteristics signify membership in a “protected class” or group has experienced a history of discrimination and disadvantage
  • Some have argued for universal approach that provides uniform protection to all without reference to specific characteristics
  • ACA reflects both approaches; building and expanding existing protection for disadvantaged groups, as well as protection for all
    • o Law prohibiting insurer from charging higher premiums base on race reflects the traditional approach (protected class)
    • o Guarantee of affordable coverage approach as a percentage of household income reflects the universal approach (equality for all)
  • Third, concepts of equity and justice in health care extend beyond discrimination to reach health disparities
  • A health disparity is a particular type of population-level health difference that is linked to a history of social, economic, or environmental disadvantage
  • Differences in health status or health outcomes, such as a higher burden of illness, injury, or mortality
  • Also refers to differences in access to health care and differences in the quality of care received
  • Such differences are unfair, unjust, and avoidable
  • Been a focus for over 100 years
  • Health inequities (lack of fairness) across race, gender, and disability persist, even after controlling for factors such as the ability to pay and medical need
  • Inequities are an ethical concern
  • Seen as a form of discrimination
  • Present more pragmatic (dealing with things sensibly and realistically in a way that is based on practical rather than theoretical considerations) concerns due to the lack of quality care and create excess cost
  • ACA aims to reduce and eliminate health equities
    • o Example: By promoting broader access to affordable health care, such as the expansion of Medicaid, requiring new plans to cover preventative care without deductibles can greatly reduce inequities by improving overall health
  • Ultimately, the concepts of justice and equity point to the goal of health equity
  • Health equity is an ambitious goal
  • That everyone has a fair and just opportunity to be as healthy as possible
  • Requires removing obstacles to health such as poverty, discrimination, and their consequences, including powerlessness and lack of access to good jobs with fair pay, quality education and housing, safe environments, and health care
  • Social and economic factors also influence health outcomes
  • Social Determinants:
    • o Conditions of early childhood
    • o Education
    • o Employment
    • o Income
    • o Housing
    • o Physical environment
    • o Access to food
    • o Discrimination
    • o Social problems
  • Addressing these social determinants of health is important for achieving greater and more equitable health on a population level

H. III Equitably spreading health risks – the role of insurance[edit]

  • In most developed countries, it is assumed that everyone has a right to health care
  • Private health care exists in almost all nations, but most countries rely on a public health insurance financing system to ensure universal access to health care
  • Government finances health insurance directly through general revenue funds and publicly owned (employees are hospital employees):
    • o England
    • o Canada
    • o Scandinavian Countries
    • o Iberian
    • o Mediterranean Countries
  • Social Insurance System, quasi-public social insurance funds pay for health care under contracts with providers, financed largely by employer and employee contributions. Some hospitals are publicly-owned, but many are nonprofit, and some are for-profit private facilities:
    • o France
    • o Japan
    • o Germany
    • o Austria
    • o Belgium
  • Finance care through private insurance companies; everyone is required to be insured. Financed through public funds and are heavily regulated:
    • o Switzerland for lower-income households
    • o Netherlands for everyone
  • The U.S does not attempt to make health care universally available
    • o S has cobbled together a system of private and public insurance that covers most Americans, but still leaves many without insurance
    • o 2016, 55% were covered by health insurance through work
    • o Heavily subsidized by the public generally through tax exclusions and deductions, and is paid for in varying proportions by employers and employees
    • o 41% were covered through public programs:
      • Elderly
      • Disabled
      • Poor children
    • o 16% were covered by other private insurance – policies they purchased themselves
    • o 9% of Americans were uninsured
  • Uninsured individuals have a right to obtain emergency care in a hospital, whether or not they can pay for it, but do have a right to nonemergency care after the emergency
  • Uninsured gets less care and get it when it is later when it is ineffective, resulting in worse health status and earlier death
  • ACA increased access to care by expanding Medicaid for lower income Americans
  • ACA offered tax credits to help middle-income uninsured Americans purchase health insurance
  • States that expanded Medicaid decreased their uninsured individuals by 1%
  • ACA requires people who can afford health insurance to purchase it or pay a penalty
  • 2019, tax penalty is eliminated
  • ACA penalizes large employers who do not offer their employees adequate, affordable insurance and whose employees end up receiving public subsides
  • ACA prohibits insurers from discriminating against applicants or enrollees with medical conditions requiring care
  • Universal health care is not popular, 40s-60s from physicians and now primarily insurers
  • Actuarial Fairness – implies that fairness requires individuals to pay premiums based on an estimate of the likelihood that they will need medical care
  • The ACA rejects the notion of actuarial fairness in most respects, although it allows premiums to reflect the individual’s age, tobacco use, and geographic area
  • ACA allows insurers to impose a premium surcharge of up to 50% for tobacco users, making health care unaffordable for many smokers
  • ACA does not embrace universal right to health care – of social solidarity and mutual aid
  • Ability to pay is not the only determinant (factor that decisively affects the nature or outcome of something) of access to health care
  • Even if an individual is covered by insurance, he or she may not be able to get that treatment or may get a substandard treatment
    • o Evidence proves that persons of color do not get necessary treatment or get a significant lesser quality of care than do other people
    • o People with chronic diseases, such as HIV have difficulties finding health care professionals who are willing to provide care

I. The cost and benefit of health care spending[edit]

  • Health care is expensive
  • U.S spends far more than any other nation in the world
  • U.S spends more on health care than anything else and have been increasing for decades
  • U.S is not the world’s healthiest country even though they spend the most on healthcare
  • Poor access to primary care has contributed to inadequate prevention and management of chronic diseases, delayed diagnosis, incomplete adherence to treatments, wasteful overuse of drugs and technologies, and coordination and safety problems
  • U.S healthcare system performance ranks last among 11 high-income countries
  • U.S is the only high-income country lacking universal health insurance coverage
  • U.S has taken an important step to expand coverage through the ACA
  • More than 20 million Americans gained insurance coverage
  • Americans with insurance often face far higher deductibles and out-of-pocket costs than citizens of other countries, whose system offers more financial protection

J. conclusion[edit]

  • Greater cost does not necessarily buy better health or health care
  • Cost control strategy to improve quality care in order to:
    • o Reduce iatrogenic injuries
    • o Increase the management of care to reduce duplicative testing and right size the level of care
    • o Improving knowledge about the comparative effectiveness of different interventions or pharmaceuticals
    • o Increasing competition over quality and cost and linking payment to quality and efficiency
    • o Challenge- health care costs are so easily shifted among entities within our health care system
    • o Several interventions in the areas of housing, income support, nutrition support, and care coordination and community outreach have had positive impact in terms of health improvements or health care spending reduction
    • o ACA requires that private insurers provide parity (state of condition of being equal; especially regarding status or pay) in their coverage of mental health care, but there will still be issues in defining that care
    • o ACA requires an “essential benefits package” be defined for health insurance plans
    • o Third-party payers can reduce their costs significantly by establishing co-pays and high deductibles; cost reductions are shifted directly to consumers, forgoing health care they would ordinarily have used
    • o High co-pays and deductibles are seen as necessary to induce consumers to make financially responsible decisions in their consumption of health care services

K. what is illness?[edit]

  • Illness is thus a socially constructed deviance.
  • To be ill is to have deviant characteristics for which the sick role is appropriate. Illness has many ratifications.
  • First, it may relieve the individual of certain responsibilities
  • Second, a sick person can be assisted by treatment defined by the medical model; becoming a patient, an object of medical attention by a doctor
  • The doctor has a right and the ability to label someone ill
  • Finally, illness costs money. It may cost the patient money in lost time and in medical expenses
  • If the patient has private or public insurance, illness means the patient is entitled to have insurance cover some or all the cost
  • Understanding our illness also affects society

2. Health law -Chapter 2 Quality control regulations: licensing health care professionals[edit]

A. 1. Quality of care[edit]

  • Quality of care is the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge
  • To promote quality of care, the law regulates the quality of health care professions in a wide variety of ways
  • It enforces the standard of care through malpractice law suits, policies relationships between professions and institution providers, and enforces contractual provisions that permit insurers to refuse payment for poor quality or unproven treatments, among others
  • State law controls the licensure of health care professionals under the state’s policy power
  • State licensing statutes govern entry into the license professions; regulate the health care services that licensed professionals may provide; and prohibit unlicensed professions
  • The system also monitors the quality of care provided by licensees and penalizes or removes incompetent practitioners from practice
  • Professional licensure in the U.S is commonly described as a system of professional self-regulation because the entities are known as “boards”
  • The boards operate formally as state administrative agencies
  • Usually includes lay members to represent a consumer perspective and governed by procedures and standards set in the state’s licensing statutes and administrative procedures act
  • Are subject to judicial review in both their adjudicatory and rulemaking decisions
  • Licensures are subject to both federal and state laws
  • ACA pushes stronger reliance on scientific evidence of effectiveness and outcomes as the gold measure of quality
  • ACA also fosters expanded roles for nurses and physician assistants as the health care system is reorganized to emphasize continuity of care, accessible preventive care, and management of chronic illness at a lower cost

B. Discipline[edit]

  • FDA has the authority to approve and monitor the safety of drugs and devices
  • FDA is an important gatekeeper of access to drugs
  • Once a drug is approved for prescribing, the FDA does not have the authority to restrict physicians in their prescribing of the drug for particular purposes
  • Once the drug is approved for a particular purpose, a physician may prescribe the drug “off-label” for another purpose
  • DEA more directly regulates prescribing practices through its authority under the Controlled Substances Act (CSA)
  • Doctors must have a permit issued by the DEA to prescribe drugs on Schedules II through V
  • DEA may revoke a permit or pursue criminal action against physicians whose prescription or distribution of these drugs falls outside of the DEA’s view of legitimate medical practices
  • Policymakers are fearful that incompetent/corrupt physicians are causing the increase in opioid abuse, thus causing a shift in the law
  • CDC discourages physicians from prescribing opioids for pain as a first line of treatment, and recommends dosage limitation when opioids are used
  • DEA was moving to criminalize physicians prescribing controlled substances as the state medical boards took steps to ensure access to pain treatment
  • Conflict between state and federal policy on this issue continues
  • State prosecutions of physicians prescribing pain medications may be increasing as well
  • Three strikes and you’re out??

C. III Complementary and alternative medicine[edit]

  • Complementary and alternative medicine (CAM) is a broad domain of resources that encompasses health system, modalities, and practices and their accompanying theories and beliefs
  • The National Institutes of Health, National Center for Complementary and Alternative Medicine (NCCAM) defines CAM as health services that “are not presently considered to be part of conventional medicine.”
  • The four domains are whole medical systems such as:
    • o Homeopathy
    • o Mind-body medicine, including music; energy medicine, including therapeutic touch; and bioelectromagnetic-based therapies, such as pulse fields
  • CAM is unconventional
  • Licensed doctors can use CAM therapies and integrate them with conventional medicine
  • Integrating CAM will attract the attention of the licensure board if the practice violates licensure standards for acceptable or appropriate treatment
  • Licensure board may take action against unlicensed CAM practitioners for violating the state’s prohibition against the unlicensed practice of a licensed health care profession
  • Institute of Medicine adopted the following:
    • o “Ethical Commitments” to guide its work in regard to CAM: A social commitment to public welfare; a commitment to protect patients and the public; respect for the patient autonomy; recognition of medical pluralism, and public accountability

D. Unlicensed providers[edit]

  • State medical board has the primary responsibility for enforcing the prohibition against the unauthorized practice of medicine by unlicensed providers, pursuant to that state’s medical practice act
  • Prohibition is enforced by criminal sanctions against the unlicensed practitioner and license revocation or criminal sanctions against any physician who aids and abets the unlicensed practitioner
  • California Rule:
    • o “Any person who practices or attempts to practice, or who advertises or holds himself out as practicing, any system or mode of treating the sick or afflicted in this state, or who diagnoses, treats, operates for, or prescribes for any ailments, blemish, deformity, disease, disfigurement, disorder, injury, or other physical or mental condition of any person” without a license is in violation of the act”
    • o The person is prohibited from providing certain high-risk services
    • o The person must make certain detailed disclosures to the “client”

E. Scope of practice regulation[edit]

  • ACA provides significant support for health care workforce development directed toward advanced practice nursing and other non-physician health professional
  • Licensed non-physician health care providers cannot legally practice medicine, but practices that fall within their own licensure (for example, a nurse or a physician assistant) are not considered the practice of medicine
  • If a nurse engages in practices that exceed those authorized in the nurse practice act, that nurse would be guilty of exceeding the authorized scope of practice of the profession of nursing, as well as violating the prohibition against the unauthorized practice of medicine
  • SOP focuses on boundary setting between professions and attempts to separate medicine from nursing from other health care disciplines
  • SOP regulation depends on identifying discrete activities that “belong” to each profession
  • The legislature substantially revised the law affecting the nursing profession with enactment of the Nursing Practice Act of 1975 – “Professional Nursing”
  • The earlier statue limited nursing practice to “Services”
  • A Nurse Practitioner (ANPs) (including nurse midwives, nurse anesthetists, and other specialist nurse practitioners) view themselves as operating from a nursing model of health care and acting as independent practitioners who collaborate with physicians
  • Physicians Assistants (PA) view themselves as working as physician delegates
  • The Federal Trade Commission has long been active in contesting what it views as anticompetitive scope-of-practice regulation by health profession boards
  • It has brought cease-and-desist actions against state health profession boards for engaging in unfair competition in violation of the FTC Act in restrictive scope-of-practice standards

3. Health law -Chapter 3 Quality control regulation of health care institutions[edit]

  • Patient safety and well-being are directly dependent on the quality of health care institutions as much as on the quality of the individual patient’s doctor or nurse or therapist
  • State and federal governments have quality-oriented tools other than “command and control” regulation
  • The most powerful tool held by the federal government is its use of Medicare payment methodologies that “pay for performance” or engage in “value-based purchasing”
  • These payment systems typically either withhold or reduce payment for care that does not meet certain specific outcomes targets
  • Finally, professionals working in health care facilities have ethical and legal obligations of their own to assure the quality of the organizations in which they care for patients

A. II organizational context[edit]

  • The federal government currently contracts with fourteen regional Quality Innovation Network-Quality Improvement Organizations (QIN-QIOs) that provide technical assistance, education, and data analysis for Medicare beneficiaries and providers, with a special focus on improving care coordination for Medicare beneficiaries among the many providers
  • Nursing homes are subject to a high degree of quality control regulation by both federal and state governments, especially as compared to hospitals
  • Hospitals and nursing homes differ in their patient population; their scope of services; the composition of their staffing; and other external pressures
  • Each institution is treated differently in terms of governmental quality-control regulations
  • The selection of a nursing home is usually made under duress, often upon discharge
  • In contrast to the hospital market, the demand for nursing home care exceeds available beds
  • Low supply and excess demand have been associated with lower quality perhaps because of weak competition or because enforcement efforts are constrained by the lack of alternatives for continuing care of the residents
  • Nursing homes were originally developed as “mom-and-pop” enterprises
  • After the advent of Medicare and Medicaid, nursing homes attracted substantial activity from investors and were viewed primarily as real estate investments
  • Most nursing homes are for-profit
  • Nonprofit homes offer higher quality care
  • Physicians are still largely absent from daily medical care in nursing homes
  • RNs act primarily as administrators rather than direct care
  • Medicaid pays for nearly one million of the 1.5 million nursing home residents
  • Medicare pays for very limited nursing home services, covering only shorter stays for rehabilitations
  • Medicaid pays skilled nursing facilities per diem for each Medicaid resident
  • Because nursing home care consumes a large portion of the Medicaid dollar and Medicaid is the largest spending item in state budgets, Medicaid payment levels for nursing homes are contentious and many argue that they are inadequate
  • Hospitals are subject to frequent substantial lawsuits for injuries to patients
  • Mental impairment makes many nursing home residents poor witnesses
  • Limited remaining life spans and disabilities minimize legally recognizable damages
  • Many states enacted legislation some years ago providing enhanced damages and attorney’s fee to encourage nursing home patients to pursue private remedies as a means of enforcing regulatory standards
  • Nursing home frequently include binding predispute arbitration clauses in admission agreement

B. III. Defining and assessing quality (chapter 3)[edit]

  • Three components on which quality of care can be measured:
    • o The technical
      • The application of the science and technology of medicine and other health sciences, to the management of the patient’s health issue
    • o The interpersonal
      • The social and psychological interaction between client and practitioner
    • o Amenities
      • The more intimate aspects of the settings in which care is provided
    • The most influential current expression of quality joins quality, cost, and access by defining quality health care as health care that is safe, effective, patient-centered, efficient, and equitable
    • IHI Triple Aim Initiative expands the definition of quality health care to include population health along with improving the patient experience of care, including both quality and satisfaction, and reducing the per capita cost of care
    • Structure, process, and outcome. Organizational structures influence the processes of care and both influence the actual outcomes of care
    • Structural standards for quality are perhaps the easiest to implement
    • Process standards relate directly to the activities that take place in the delivery of care
    • Setting standards for staffing
      • o Staff-to-resident and nurse-to-resident ratio is a structural standard that has been viewed as a key indicator of quality in nursing homes and hospitals
    • Federal requirements for nursing homes receiving Medicare or Medicaid do not specify a required staff ratio although they do establish staff training requirements
    • Federal regulations promulgated (promote or make widely known) in 2016 to require that each nursing home engage in a “facility assessment” at least annually

C. IV. Regulatory process – a. nursing homes: licensure and medicare/medicaid certification[edit]

  • Nursing homes that wish to receive payment for services to Medicare or Medicaid beneficiaries must be licensed by the state and must meet federal standards in order to be certified to enter into a provider agreement with those programs
  • Medicare and Medicaid standards apply to every resident in the facility and not only to beneficiaries
  • The “conditions of participations” applicable to hospitals but they are often quite similar

D. the medicaid act[edit]

  • The purpose of the Act is to enable the federal government to assist states in providing medical assistance to the:
    • o Aged
    • o Blind or disabled individuals
    • o Whose income and resources are insufficient to meet the costs of necessary medical services and rehabilitation
    • o Individuals to attain or retain capabilities for independence or self-care
  • To receive funding, a state must submit to the Secretary and have approved by the Secretary, a plan for medical assistance, which meets the requirement of the Act
  • The plan must include descriptions of the standards and methods the state will use to assure that medical or remedial care services provided to the recipients “are of high quality”
  • The state plan must also provide “for a regular program of medical review”
    • o Each patient’s need for skilled nursing facility care
    • o A written plan of care
    • o Where applicable, a plan for rehabilitation prior to admission to a skilled nursing facility
    • o Further, the plan must provide for periodic inspections by medical review team
  • A skilled nursing facility must meet “such other conditions relating to the health and safety of individuals who are furnished services in such institution or relating to the physical facilities thereof as the Secretary may find necessary
  • The state plan must provide for the appropriate state agency to establish a plan, consistent with regulations prescribed by the Secretary
  • The appropriate state agency must determine on an ongoing basis whether participating institutions meet the requirements for continued participation in the Medicaid program
  • The Act gives the Secretary the authority to “look behind” the state’s determination of facility compliance and make an independent and binding determination. Of whether institutions meet the requirements for participation in the state Medicaid plan
  • In conducting the review, the state must use federal standards, forms, methods, and procedures

E. implementing regulations[edit]

  • Congress gave the Secretary a general mandate to promulgate rules and regulations necessary to the efficient administration of the functions with which the Secretary is charged by the Act
  • Under the system, the states conduct reviews of nursing homes pursuant to the Act
  • The Secretary determines whether the nursing home surveyed is eligible for certification and eligible for Medicaid
  • Whether the nursing home surveyed is eligible for certification and, thus, eligible for Medicaid funds
  • Secretary requires the states to use to show that the nursing homes participating

in Medicaid under an approved state plan meet the requirements of participation contained in the Act and the regulations

F. the secretary’s duty[edit]

  • The Secretary of Health and Human Services has a duty to establish a system to adequately inform herself as to whether the facilities receiving federal money are satisfying the requirements of the Act, including providing high quality patient care
  • Nothing in the Medicaid Act indicates that Congress intended the physical facilities to be the end product
  • Rather the Act is to provide medical assistance and rehabilitative services
  • The Act repeatedly focuses on the care to be provided
  • The Act provides that health standards are to be developed and maintained
  • States must inform the Secretary what methods they will use to assure high quality care
  • In addition, the “adequacy of the services available”
  • Periodic inspections must address “the care being provided” in nursing facilities
  • The Secretary, not the states, determines which facilities are eligible for federal funds
  • While participating in the program is voluntary, states who choose to participate must comply with federal requirements
  • The inspections may be conducted by the states, but the Secretary approves or disapproves the state’s plan for review
  • The “look behind” provision and its legislative history clearly show that Congress intended the Secretary to be responsible for assuring that federal Medicaid money is given only to those institutions that actually comply with Medicaid requirements
  • Requirements includes
    • o High quality medical care and rehabilitative services

G. 42 U.S.C.A Sections 1396r[edit]

  • Quality of Life
    • o A nursing facility must provide services and activities to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident in accordance with a written plan of care
  • Requirements Related to Residents’ Rights-
    • o Free choice
      • The right to choose personal attending physician and informed about advance about care and treatment
    • o Free from restraints
      • The right to be free from physical or mental abuse, corporal punishment. Involuntary seclusion, and any physical or chemical restraints impose for discipline or convenience
    • o Privacy
      • The right to privacy with regard to accommodations, medical treatment, written and telephonic communications, visits, and meetings of family and of resident group
    • o Accommodation of needs
      • The right to reside and receive services with reasonable accommodation of individual need and preferences
    • o Participation in other activities
      • The right of the resident to participate in social, religious, and community activities
    • o Use of psychopharmacologic drugs
      • May be administered only on the orders of a physician and only as part of the written plan of care
    • o Transfer and discharge rights
      • In general, a nursing facility must permit each resident to remain in the facility and must not transfer or discharge the resident from the facilities unless:
        • Necessary to meet resident’s welfare
        • Patient’s health has improved
        • Safety of individuals in facility is endangered
        • Health of individuals would be endangered
      • o Access and Visitation Rights
        • (A) Permit access to residents, subject to the resident’s rights to deny or withdraw consent at any time by family members of the resident; (B) by others who are visiting with the consent of the resident

H. 42 C.F.R Sections 483.10 Residents rights[edit]

  • o Access to Equal Quality Care
    • A nursing facility must establish and maintain identical policies and practices regarding transfer, discharge, and the provision of services for all individuals regardless of source of payment
  • o Respect and Dignity
    • The right to be free from any physical or chemical restraints
    • Right to reside and receive services in the facility with reasonable accommodation of resident needs
  • o Self-Determination
    • The right to choose activities, sleeping, health care, and providers
    • Make choices about aspects of his or her life in the facility that are significant to the resident
    • Receive visitors of his choosing at any time in a manner that does not impose on the rights of the other residents

I. 42 C.f.r Sections 483.12 Freedom from abuse, neglect, and exploitations[edit]

  • The facility must ensure that the resident is free from physical or chemical restraints. When the use of restraints is indicated, the facility must use the least restrictive alternative for the least amount of time and document on-going review

J. 42 C.F.R Sections 483.25 quality care[edit]

  • Bed rails, the facility must attempt to use appropriate alternatives before installing a bed rail, and review the risks and benefits of using the bed rails
  • CMS State Operations Manual, Appendix PP (11-22-17)
    • o Using bed rails that keep a resident from voluntarily getting out of bed;
    • o Placing a chair or bed close enough to a wall that prevents them from rising or getting out of the bed
    • o Placing resident on a concave mattress so that the resident cannot independently get out of bed
    • o Tucking a sheet tightly that the resident cannot get out of bed or fastening fabric or clothing so that a resident’s freedom of movement is restricted
    • o Placing a resident in a chair; such as a bean bag, recliner, that prevents a resident from rising independently;
    • o Using devices in conjunction with a chair, such as trays, tables, cushions, bars, or belts, that the resident cannot remove and prevents the resident from rising
    • o Using a position alarm to monitor the resident moving; that the resident is afraid of moving and setting off the alarm
  • The facility is accountable for:
    • o Appropriate assessment
    • o Care planning by the interdisciplinary team
    • o Documentation of the medical symptoms
    • o Use of the physical restraint for the least amount of time possible
  • Falls do not constitute self-injuries behavior or a medical symptom that warrants the use of a physical restraint
  • Reasons for using restraints for staff convenience or discipline may include:
    • o Staff are too busy to monitor
    • o Believes that the resident does not exercise good judgement; including that he/she forgets about his/her physical limitations in standing, walking, or using the bathroom alone and will not wait for staff
    • o Staff stating that family requested resident to be restrained
    • o New or temporary staff do not know the resident
  • Bed rails may have the effect of restraining one individual but not another
  • If medication has a sedating or subduing effect, and is not administered to treat a medical symptom, the medication is acting as a chemical restraint
    • o May have been caused intentionally or unintentionally by staff
  • Enforcement: Inspection and Sanctions
    • o Survey process with an acceptable degree of accuracy, detects, and documents violations of standards

K. v. private accreditation[edit]

  • Private accreditation is a nongovernmental, voluntary activity typically conducted by not-for-profit associations
  • The Joint Commission (TJC) and the National Committee on Quality Insurance (NCQA) are two of the leading organizations in the accreditation of health care entities
  • TJC accredits about 80% of the hospital in the United States; it’s like having a seal of approval
  • Under the Medicare Statute, hospitals, home health care agencies, and a few other types of health care organizations accredited by accreditation programs approved by CMS are deemed to have met the requirements for Medicare certification without further inspections by the federal government
    • o “Deemed Status” is extended to Medicaid providers as well if Medicaid requirements are identical with Medicare requirements
  • Private accreditation programs traditionally have engaged in practices that encourages voluntary subscription to the accreditation program
    • o Accreditation programs traditionally perform only announced site visits and keep negative evaluations confidential, at least until the accreditation itself is reduced or not renewed
  • With TJC’s accrediting program for hospitals, in particular, governance and policymaking are dominated by physician and hospital leaders
  • TJC’s accreditation survey is explicitly consultative, rather than enforcement oriented, in nature
  • An accreditation organization that is seeking approval from CMS for deemed status for accredited providers must provide evidence that its accreditation standards are comparable to the Medicare conditions of participation
  • It must also agree to perform unannounced surveys at least as often as required by statute
  • Must supply CMS with a provider’s survey reports upon requests
  • Must inform CMS promptly of adverse accreditation decisions
  • The TJC accreditation process has been criticized as ineffective in assuring compliance with government regulations
  • TJC has had a tremendous influence on the operation of hospitals
  • TJC embraces the patient safety movement
    • o Encouraging hospitals to report errors and root cause analyses for the benefit of systemic changes in areas such as wrong-site surgery and medication errors and has spawned a number of refinements over the years
    • o TJC was the key factor and that their patient safety programs were linked specifically to TJC’s patient safety standards and goals

4. Health law -Chapter 4 The professional-patient relationship[edit]

A. esquivel v. watters court of appeals of kansas, 2007 (forming the relationship)[edit]

  • Facts:
    • o Michelle and Jesse Esquivel, the parents of Jadon Esquivel, appeal the district court’s entry of summary judgement in favor of Dr. Aaron T. Watters and the South-Central Kansas Regional Medical Center (SCKRMC) in a wrongful death actions which rose from Jadon’s death several weeks following his birth
    • o Michelle was given a certificate for a sonogram to determine the sex of the baby by a clinic worker of SCKRMC
    • o Went to sonogram on November 15, 2001, signed a “Consent to Procedure to Determine Sex of Unborn Baby”
      • Propose of the procedure is an attempt to determine the sex of the unborn baby, no guarantee that an accurate determination can be made
      • The undersign, hereby waives, and releases SCKRMC and everyone who works there of any responsibilities
      • David Hazlett, the tech who performed the sonogram noted that Michelle’s baby’s bowel was outside of his body but was not qualified to make a medical diagnosis, so he was not allowed to tell Michelle
      • David sent the sonogram pictures to the radiologist, but the radiologist refused to look at the sonogram because it was only to determine the gender and not for diagnosis
      • David also reported the irregularity to Michelle’s obstetrician
      • Nurse attempted to call Michelle 11 times by telephone over the next ten days
      • Dr. Watters did not note Michelle’s chart
      • On 11/26/2001, nurse saw Jesse and asked her to call the doctor’s office, Michelle missed her prenatal appointment
      • Saw Michelle on 1/04/2002, but since chart was not noted, Dr. did not discuss abnormality because he forgot
      • Saw Michelle again a month later and still forgot
      • 2/8/2002, Michelle was sick and went to hospital for treatment
      • Jadon was born by emergency c-section
      • Nobody was aware of Jadon’s condition until he was born
      • Jadon was transferred to Wesley Medical Center in Wichita
      • Dr. Phillip performed surgery and disclosed that almost all of Jadon’s bowels had been dead for weeks
      • Since there was no hope of Jadon surviving, he was sent home on 2/20/2002 and placed on palliative care and died at home on 3/3/2002
    • o Issue:
      • Did the hospital have any duty to tell Michelle about the abnormality of Jadon’s condition when she it appeared that they had no further duty to perform anything other than the sonogram?
    • o Analysis
      • District court granted summary judgement in favor of Watters based upon the failure of the plaintiffs to present expert testimony that Watters deviated from the applicable standard of care and the lack of proximate cause between Watters’ failure to notify Michelle of the abnormal sonogram and Jadon’s postnatal suffering and death
      • Court also granted that the hospital did not owe Michelle and Jesse the duty upon which they based their claims, and their claims were barred by the release signed by Michelle before the sonogram
      • Court found that hospital was limited to performing a sonogram and to determine the gender of Michelle’s baby in which they did in a non-negligence manner
      • Hospital had no further duty to Michelle
      • The hospital only owed Michelle the duty to perform the sonogram in a no negligent manner
    • o Conclusion:
      • Court of Appeals found that the summary judgement based upon the lack of a duty was appropriate and discussion of the release and waiver in the consent form signed by the plaintiff is omitted

B. White v. harris supreme court of vermont, 2011(Forming the relationship)[edit]

  • Facts:
    • o Plaintiffs appeal from a superior court order granting summary judgement to defendant Fletcher Allen Health Care, Inc. in his wrongful death action alleging medical malpractice
    • o Case arises from the plaintiff’s 14-year-old daughter’s suicide
    • o Plaintiff sued the defendant, which employed a psychiatrist who was briefly involved with decedent’s case through a telepsychiatry research study
    • o Plaintiffs argue that summary judgement was improperly granted on the issue of the duty owed to decedent by the psychiatrist
    • o Supreme Court agreed and thus reversed and remand for additional proceedings
    • o Decedent suffered from ongoing mental health problems
    • o On the recommendation of her case manager, she consulted with defendant’s psychiatrist through a telepsychiatry research study he was conducting
    • o Plaintiffs and decedent completed pre-assessment documentation, and they participated in a one-on-one time, ninety-minute video-conference session on 8/2006
    • o After session, participants completed a questionnaire about their reaction to using telemedicine
    • o Psychiatrist later completed a consultation evaluation that described decedent and the history of her illness
    • o Also provided the doctor’s diagnostic impression of decedent and set forth recommendations for an initial treatment plan
    • o Evaluation stated:
      • No follow-up services would be provided
      • No medication prescriptions would be directly provided by the doctor
      • Report further explained that the recommended treatment plan was weighed by decedent’s treatment team, including her primary care physician, for possible implementation
      • After sending his evaluation, the psychiatrist had no further interaction with plaintiffs, decedent, or any member of her treatment team
    • o On 6/10/2007, decedent committed suicide
    • o Died from ingesting Propoxyphene, Opiates, and Citalopram
    • o These were not prescribed by the psychiatrist
    • o 6/2009, plaintiffs filed an amended complaint, alleging that defendant, among the eight doctors and medical care providers, treated decedent in a manner that
      • Fell below the standard of care required of reasonably skillful, careful, and prudent professionals
    • o That decedent died as a result
    • o Defendant moved for a summary judgement in December 2009, asserting that they had no duty to decedent when she committed suicide because they had no doctor-patient relationship
      • Arguing that any such relationship was terminated in writing following their one-time interaction
    • o Facts disclose a consultation of limited duration
    • o Decedent and her mother signed an informed consent form and the doctor stated in writing that the scope of his services was limited
    • o Record reveals that the parties’ expectation that the doctor would aid in decedent’s treatment through his expertise, regardless of the mechanism of doctor-patient contact
  • Issue
    • o Did the psychiatrist have a duty to care for the decedent because of his professional contact with her when it appeared that his duty was of limited duration?
  • Analysis
    • o Trial court agreed with the psychiatrist stating that “the contact with the decedent was so minimal as to not establish a physician-patient relationship
    • o Because of this, found that no duty existed at the time of the decedent’s death
    • o Court assumed that if there was a patient-physician relationship, it was terminated following the video conference, thus, any duty was extinguished by termination of the relationship and no duty existed at the time of the death
  • Conclusion
    • o In requesting a consultation, decedent’s treatment team specifically sought recommendations about her medication, particularly given the increase in her anger, aggressive behavior, and self-mutilation
    • o The doctor was provided with her medical records, which includes information such as her history of depressive behavior, and recently exhibited an increase in anger, aggressive behavior, along with more cutting behavior
    • o All which bears on the scope of the professional relationship from which the defendant’s duty arose and it helps to frame then applicable standard of care
    • o The court found it sufficient to support the existence of a duty
    • o Court held that the ninety-minute consultation performed created a doctor—patient relationship
    • o Reversed and remanded
  • Supreme Court Analysis:
    • o Defendant’s involvement here was limited, but that does not mean that it was nonexistent
    • o Here, the relationship between doctor and patient was even more direct than a third-party retained IME doctor
      • Became involved on referral from her treatment team
      • Reported to the team his findings and recommendations after evaluation
    • NOTES:
      • o Physician-patient relationship can be considered initially as a contractual one
      • o Physicians have no obligation to offer services that a patient may require that are outside of their scope of practice
      • o Thus, limiting the contract to a type of procedure
        • Office visit or consultation
      • o Once a physician-patient relationship has been created, physicians are subject to an obligation of “continuing attention”
      • o Consultation by phone does not constitute a doctor-patient relationship

C. Tunkl v. regents of university of california supreme court of california, 1963(exculpatory clause) a contract releiving a party of liability if damages are caused during execution[edit]

D. An exculpatory clause is a contract provision that relieves one party of liability if damages are caused during the execution of the contract. The party that issues theexculpatory clause is typically the one seeking to be relieved of the potential liability.[edit]

  • Facts:
    • o University of California at Los Angeles Medical Center admitted Tunkl as a patient on 6/11/1956
    • o Regents maintain the hospital for the primary purpose of aiding and developing a program of research and education in the field of medicine
    • o Patients are selected and admitted if the study and treatment of their conditions would tend to achieve these purposes
    • o Tunkl signed a document “Conditions of Admission”
      • #6 reads: RELEASE: The hospital is a non-profit, charitable institution and releases the hospital from any and all liability for the negligent or wrongful acts or omission of its employees
    • o Tunkl brought action to recover damages for personal injuries alleged to have resulted from a negligence of two physicians employed by the hospital
    • o Tunkl died after suit was brought and his wife, executrix was substituted as plaintiff
  • Issues:
    • o Is the defendant released from liability for future negligence when it appears that they are a charitable research hospital?
  • Analysis:
    • o Plaintiff stipulated that the hospital had selected its employees with due care
    • o Trial court ordered that the issue of the validity of the exculpatory clause be first submitted to the jury and that, if the jury found that the provision did not bind the plaintiff, a second jury will try the issue for alleged malpractice
      • If the first jury found that the clause was valid in not binding the plaintiff, he will allow a second jury to try for a malpractice case
    • o The first jury found the validity of the release and the court entered into a judgement in favor of the plaintiff
  • Conclusion
    • o We think the that hospital-patient contract clearly falls within the category of agreements affecting the public interest
    • o To meet this test, the agreement need only fulfill some of the characteristics above outlined; here, the relationship fulfills them all
    • o When the patient signed the contract, he completely placed himself in the control of the hospital; subjecting himself to the risk of carelessness
    • o To exempt the hospital completely from any standard of due care is to grant it immunity by the side-door method of a contractual clause exacted of the patient
    • o Judge is reversed

E. shorter v. drury Supreme court of washington, 1985[edit]

  • Facts:
    • o Wrongful death medical malpractice action arising out of the bleeding death of a hospital patient who, for religious reasons, refused a blood transfusion
    • o Doreen Shorter was a Jehovah’s Witness
    • o Prohibited by their religious doctrine from receiving blood transfusion
    • o Doreen became pregnant late in the summer of ‘79
    • o In October ’79 she consulted with the defendant, Dr. Drury
    • o Drury diagnosed her as having had a “missed abortion”
    • o Occurs when a fetus dies, and the uterus fails to discharge it
    • o Three alternatives to clean out the uterus
      • Dilation and curettage
      • Suction device
      • Vaginal suppositories
    • o Doctor recommended the D and C and advise that there could be a possibility of bleeding and perforation of the uterus
    • o At trial, Mr. Shorter revealed that he was aware of the internal bleeding
    • o Day before operation, Mrs. Shorter sought a second opinion from Dr. Ott
    • o Discussed the procedure she was getting and that she was a Jehovah’s witness
    • o Ott confirmed that D and C was appropriate and advise that she could bleed during the procedure
    • o At trial, Dr. Ott confirmed that Mrs. Shorter was aware of the possibility
    • o Ott testified that Mrs. Shorter responded that she had faith in the Lord that thing should work out
    • o 6 am on 11/30, Mr. and Mrs. Shorter went to Everett General Hospital
    • o Shorters signed a consent form that included the following:
      • “I hereby release the hospital, its personnel, and the attending physician from any responsibility whatever for unfavorable reactions or any untoward results due to my refusal to permit the use of blood or its derivatives and I fully understand the possible consequences of such refusal on my part.”
    • o Approximately, one hour after surgery began, Mrs. Shorter began to bleed internally and go into shock
    • o Emergency exploratory surgery conducted by other surgeons revealed that Drury had severely lacerated Mrs. Shorter’s uterus while probing with the curette
    • o Shorter began to bleed profusely
    • o She was coherent and continued to refuse a transfusion despite Doctors telling her she would likely die due to blood loss
    • o Doctors tried to plead with Mr. Shorter, but he refused as well, and Mrs. Shorter bled to death
    • o Doctors for both sides agreed that a transfusion would have saved Mrs. Shorter’s life
    • o Shorter brought a wrongful death action alleging that Dr. Drury’s negligence proximately caused her death
  • Issues:
    • o There are three issues
    • o Will the Shorters’ be held accountable for Mrs. Shorter’s death when it appeared that they assumed the risk when they both refused to permit the blood transfusion?
  • Analysis
    • o The jury found Dr. Drury negligent and that his negligence was “a proximate cause of death.
    • o Damages were found to be $412,000
    • o Jury, however, determined that the Shorters’ “knowingly and voluntarily” assumed the risk of bleeding to death and caused 75% of the fault by refusing the transfusion
    • o Shorter was award $103,000
    • o Both parties moved for judgement notwithstanding the verdict
    • o Trial court both denied the motions
    • o Plaintiff appealed and defendant cross-appealed
  • Conclusion
    • o Public interest voids contracts against liability for negligence
    • o Juries found the release was not signed unwittingly but rather voluntarily
    • o The release was not against public policy
    • o Jury referred to Tunkl case, exculpatory clause which releases a physician or hospital from all liability for negligence
    • o Due to the patient’s religious beliefs, on the ground that they refused a blood transfusion, the jury believed that the release form signed by the Shorters was appropriate and not of public interest
    • o While Mrs. Shorter accepted the consequences resulting from a refusal to receive a blood transfusion, she did not accept the consequences of Drury’s negligence, which the jury found to be a “proximate” cause of Mrs. Shorter’s death
      • Defendant was not released from his negligence
      • Shorters were found to have assumed the risk of death by refusing to the blood transfusion that would have saved her life

F. iii. informed consent: the physician’s obligation[edit]

  • Origins of the Informed Consent Doctrine
    • o Informed consent has developed out of strong judicial deference toward individual autonomy
    • o Reflecting a belief that an individual has a right to be free from nonconsensual interference with his or her person, and a basic moral principle that it is wrong to force another to act against his or her will
    • o Justice Cardozo:
      • “Every human being of adult years and sound mind has a right to determine what shall be done with his own body.”
    • o Consent doctrines have set guidelines for medical decision making by setting boundaries for the doctor-patient relationship
    • o Consent is a foundation for:
      • Federal regulation on human experimentation
      • End of life decisions
      • Health care institutes require all patients to sign up upon admission and before various procedures
    • o Professor Alexander Capron has argued that the doctrine can serve six salutary function:
      • Protect individual autonomy
      • Protect the patient’s status as a human being
      • Avoid fraud or duress
      • Encourage doctors to carefully consider their decisions
      • Foster rational decision-making by the patient
      • Involve the public generally in medicine
    • o Informed consent has been an unnatural graft onto medical practice
  • Judicial development of informed consent into a distinct doctrine can roughly be divided into three periods:
    • o First period, up to mid-twentieth century, courts built upon the law of battery and required little more than disclosure by doctors of their proposed treatment
    • o Second period saw an emerging judicial policy that doctors should disclose the alternatives to a proposed treatment and their risks, as well as of risks of the proposed treatment itself.
    • o Third period, from 1972 to the present, has seen legislative retrenchment and judicial inertia
  • Today, a patient treated without her consent still may bring a battery action against the treating physician in most jurisdictions
  • A claim for a breach the duty to obtain informed consent to treatment allege that a physician failed to disclose important information to the patient prior to obtaining the patient’s consent, these claims are for negligence

G. b. the legal framework of informed consent[edit]

  • Negligence as a Basis for Recovery

H. Canterbury v. spence united states court of appeals, d.c circuit, 1972[edit]

  • Facts:
    • o In December 1958, Canterbury, then 19 years old began to experience severe pain between his shoulder blades
    • o Consulted two general practitioners but medications they prescribed failed to eliminate the pain
    • o Afterward, the patient secured an appointment with Dr. Spence, who is a neurosurgeon
    • o Diagnostic procedure revealed a “filling defect” in the region of the fourth thoracic vertebra
    • o Spence told patient he would have to undergo a laminectomy to correct what he suspected was a rupture disc
    • o Patient did not raise any objection to the proposed operation, nor did he probe into its exact nature
    • o Patient’s mother also spoke to Spence and he explained that surgery was occasioned by a ruptured disc
    • o She asked if the surgery was serious and Spence replied “Not any more than any other operation”
    • o Patient did not speak to Spence again prior to operation
    • o Spence performed the surgery on 2/11 at the Washington hospital
    • o Mother arrived at the hospital after the surgery was over even though before surgery, Spence told her that she did not need to come due to her not being well off
    • o Mother signed a consent form after the surgery was over
    • o The surgery found many anomalies
    • o Spence attempted to relieve the pressure on the spinal cord by enlarging the dura- outer protective wall of the spinal cord- at the area of the swelling
    • o First day after the operation, patient was recuperated normally, but then suffered a fall and an almost immediate setback
    • o There were conflict regarding precisely when or why patient fell
    • o Spence left orders that that appellant was to remain in bed during the process of voiding
    • o Orders were changed and jury found that they were changed by hospital personnel
    • o Prior to fall, patient summoned a nurse and was given a receptacle for use in voiding, but was then left unattended
    • o Patient stated that during the course of the endeavor, he slipped off the side of the bed and there was no one to assist him or side wall to prevent the fall
    • o Hours later, patient complained that he was not able to move his legs and that he was having trouble breathing
    • o Paralysis seems to have been virtually total from the waist down
    • o Spence was notified on 2/12 and rushed to the hospital
    • o Mother signed another consent form and patient was rushed to the operating room
    • o Surgical wound was reopened, and Spence created a gusset to allow the spinal cord greater room in which to pulsate
    • o Patient’s control over his muscles improved somewhat after the second operation but was unable to void properly
    • o For several years after his discharge, he was under the care of several specialists
    • o At all time was under the care of a urologist
    • o At the time of the trial in April 1968, he required:
      • Crutches to walk
      • Suffered from urinal incontinence
      • Paralysis of the bowel
      • Wore a penile clamp
    • o The patient claimed extensive pain, suffering, medical expenses, and loss of earnings
  • Issue:
    • o Will the court find that Dr. Spence was negligent when it appeared that he did not disclosure a serious risk of disability inherent in the operation?
  • Analysis
    • o Patient had failed to produce any medical evidence indicating negligence on Spence’s part in diagnosing patient’s malady or in performing the surgery
    • o No proof that Spence’s treatment was responsible for patient’s disabilities
    • o No evidence to show post-operative care negligence
  • Conclusion
    • o We reverse, the testimony of the patient and his mother that Spence did not reveal the risk of paralysis from the surgery made out prima facie (base on the first impression, accepted as correct until proved otherwise) case of violation of the physician’s duty to disclose which Spence’s explanation did not negate as a matter of law
  • NOTES: Lack of Consent
  • The average patient has little or no understanding of the medical arts
  • And ordinarily only has his physician to whom he can ask for enlightenment in order to reach an intelligent decision
  • A physician is under a duty to treat his patient skillfully but proficiency in diagnosis and therapy is not the full measure of his responsibility
  • A physician is under an obligation to communicate specific information to the patient when the exigencies of reasonable care call for it
  • It obliges the physician to advise the patient of the need for or desirability of any alternative treatment promising greater benefit than being pursued
  • Due care normally demands that the physician warn the patient of any risks to his well-being which contemplated therapy may invoice
  • To the physician, whose been trained, the evaluation may be clear but to the patient who has no experience, the answer may not be clear
  • It is the patient’s prerogative to determine for himself the direction in which his interests seem to lie
  • Duty to disclose has gained recognition in a large number of American jurisdictions, but more largely on a different rationale
  • Respect for the patient’s right of self-determination on particular therapy demands a standard set by law for physicians rather than one which physician may or may not impose upon themselves
  • Respect for the patient’s right for self-determination on particular therapy demands a standard set by law for physicians rather than one which physician may or may not impose upon themselves
  • The majority rule, moreover, is at war with our prior holdings that a showing of medical practice, however probative, does not fix the standard governing recovery for medical malpractice
  • When medical judgment enters the picture and for that reason the special standard controls, prevailing, medical practice must be given its just due
  • In general, standard exacting ordinary care applies and that standard is set by law
  • In sum, the physician’s duty to disclose is governed by the same legal principles applicable to others in comparable situations, with modification only to the extent that medical judgement enters the picture
  • Once the circumstances give rise to a duty on the physician’s part to inform his patient, the next inquiry is the scope of the disclosure the physician is legally obliged to make
  • In our view, the patient’s right of self-decision shapes the boundaries of the duty to reveal
  • Optimally for the patient, exposure of a risk would be mandatory whenever the patient would deem it significant to his decision, either singly or in combination with other risks
  • With knowledge of, or ability to learn, his patient’s background and current condition, he is in a position superior to that of most others
  • Even more clearly, the physician bears no responsibility for discussion of hazards the patient has already discovered, or those having no apparent materiality to patients’ decision on therapy
  • A doctor must consider disclosures of a variety of factors
    • o Diagnosis and prognosis
    • o Nature and purpose of the proposed treatment
    • o Risk of the treatment
    • o Treatment alternatives
    • o Consequences of patient refusal of tests or treatments
    • o Disclosing the tradeoffs of treatment versus watchful waiting
    • o Exceptions
      • Disclosure is not required when a patient waives the right to disclose
      • The duty to disclose does not cover information that the patient already knows or should know
      • Physician is not required to disclose information to a patient who does not have decision-making capacity but is obligated to disclose information to the patient’s decision-making surrogate
      • Finally, the law recognizes that physicians have a “therapeutic privilege” to withhold information that would cause the patient to become emotionally distraught if disclosed
    • A consent form, or other written documentation of the patient’s verbal consent, is treated in many states as presumptively valid consent to the treatment at issue, with the burden on the patient to rebut the presumption
    • Hospitals provide forms and develop systems to support the informed consent process
    • Nurses and physician assistants routinely disclose treatment information to patients

I. Decision aids and informed consent[edit]

  • Provides patients with detailed and specific information on treatment options and outcomes
  • Help them clarify their values and guide them through the decision-making process
  • The process by which such decision aids are used by providers and patients is called “shared medical decision-making”
    • o A process in which the physician shares with the patient all relevant risk and benefit information on all treatment alternatives and the patient shares with the physician all relevant personal information that might make one treatment or side effect more or less tolerable than the other
  • Then both parties can use this information to come to a mutual medical decision
  • Section 3501 of the ACA adopts the patient decision aid concept
    • o To facilitate collaboration between patients and caregivers in decision-making, provide information on trade-offs among treatment options, and incorporate… patient preferences and values into the medical plan
  • Section 3506 requires the Secretary of HHS to contract with an independent entity to develop consensus-based standards for such aids and to develop consensus-based standards for such aids for use in federal health programs and by other interested parties

J. disclosure of physician-specific risk information[edit]

  • Section 10331 of the ACA adopts a model of disclosure of provider performance information to consumers:
    • o When fully implemented, such information under ACA will include:
      • Measures collected under the Physician Quality Reporting Initiative;
      • An assessment of patient health outcomes and the functional status of patients;
      • An assessment of the continuity and coordination of care and care transitions, including episodes of care and risk-adjusted resource use;
      • An assessment of efficiency
      • An assessment of patient experience and patient, caregiver, and family engagement;
      • An assessment of the safety, effectiveness, and timeliness of care;
      • And other information as determined appropriate by the Secretary [HHS]
    • Physicians are able to review their results before they are publicly reported, and the Secretary HHS is admonished to ensure that the data is statistically valid and reliable
    • Providing a robust and accurate portrayal of a physician’s performance
    • Section 10331 goes one step further by providing financial incentives to patients who choose high quality providers
    • Consumers rely on information about health care risks and costs to maximize their choice
    • Consumerism assumes that most patients have the ability to be active consumers. The fault in this assumption is that patients are most likely to engage the health care system when they are ill, dependent, and weak
    • Shopping is the last thing on their minds

K. problem: content for physician compare[edit]

  • Both groups and individual providers are posted on Physician Compare
  • Participation in CMS Quality Programs shows a commitment to high quality care
  • But participation alone does mean that quality care has been achieved
  • The American Medical Association and other specialty societies complain that the site is confusing and misleading

L. Moore v. regents of the university of california supreme court of ca 1990 (disclosure of financial conflicts of interest)[edit]

  • Facts:
    • o John Moore underwent treatment for hairy-cell leukemia at the Medical Center of the University of CA at Los Angeles (UCLA Medical Center)
    • o Defendants:
      • Dr. David Golde, attending physician
      • Regents of the University of CA, who own and operate the university
      • Shirly Quan, a researcher at the university; Genetics Institute
      • Sandoz Pharm Corporation
    • o Moore visited UCLA Med Center on 10/5/1976
    • o Shortly after, he learned that he had hairy-cell leukemia
    • o After extensive amounts of blood, bone marrow aspirate, and other bodily substances, Golde confirmed that diagnose
    • o On 10/8/1976, Golde recommended that Moore’s spleen be removed, stating that he feared for Moore’s life and that the operation was necessary to slow down the progress of his disease
    • o Moore signed a written consent form authorizing the spleen operation after Golde’s representation
    • o Before the operation, Golde and Quan “formed the intention and made arrangements to obtain portions of Moore’s spleen following its removal
    • o They did not tell Moore their intention and the research activity did not have any relations to Moore’s medical care
    • o Surgeons at UCLA removed Moore’s spleen on 10/20/1976
    • o Moore returned to UCLA Med Center several times between November 1976 and September 1983
    • o He did so at Golde’s directions and based upon representation “that such visits were necessary and required for his health and well being
    • o Golde withdrew blood, blood serum, skin, bone marrow aspirate, and sperm
    • o Moore travelled from Seattle to LA because it was only performed at UCLA and only under Golde
    • o Throughout the period of time that Moore was under Golde’s care and treatment, the defendants were actively involved in a number of activities which they concealed from Moore
    • o Specifically, defendants were conducting research on Moore’s cells and planned to “benefit financially and competitively by exploiting the cells and their exclusive access to the cells by virtue of Golde’s on-going physician-patient relationship
    • o Sometimes before August 1979, Golde established a cell line from Moore’s T-lymphocytes
    • o On 1/30/1981 the Regents applied for a patent on the cell line, listing Golde and Quan as inventors
    • o Regents, Golde, and Quan would share in the loyalties and profits
    • o On 3/20/1984 the patent was issued naming Golde and Quan as the inventors and Regent as the assignee
    • o With the Regent’s assistance, Golde negotiated agreements for commercial development of the cell line and products to be delivered from it
    • o Under an agreement with Genetics Institute, Golde became a “paid consultant” and acquired the rights to 75,000 shares of common stock
    • o Genetics Institute agreed to pay Golde and Regent $300,000 over three years, including a pro-rata share of Golde’s salary and fringe benefits in exchange for exclusive access to the materials and research performed
    • o On 6/4/1982, Sandoz was added to the agreement and compensation payable to Golde and Regents was increased by $110,000
    • o Throughout this period, Quan spent as much time as 70% of her time working on the Regents on research related to the cell line
  • Issue:
    • o Will the court find that Golde had the duty to disclose to Moore his intention to do research and financial gain prior to the surgery although it appeared to have no effect on the treatment that Moore was receiving?
  • Analysis
    • o Moore repeatedly alleges that Golde failed to disclose the extent of his research and economic interests in Moore’s cells
    • o These allegations state a cause of action against Golde for invading a legally protected interest of his patient
    • o Be characterized as a breach of a fiduciary duty to disclose facts material to the patient’s consent or as the performance of medical procedures without first having obtained the patient’s informed consent
    • o Three well established principles:
      • A person of adult years and in sound mind has the right, in the exercise of control over his own body, to determine whether or not to submit to lawful medical treatment
      • The patient’s consent to treatment, to be effective, must be informed consent
      • Soliciting the patient’s consent, a physician has a fiduciary duty to disclose all information material to the patient’s decision
    • o These principles lead to the following conclusion:
      • A physician must disclose personal interests unrelated to the patient’s health, whether research or economic, that may affect the physician’s professional judgement
      • A physician’s failure to disclosure such interest may give rise to a cause of action for performing medical procedures without informed of consent or breach of fiduciary duty
    • o Under Business and Professions Code section 654.2:
      • A physician may not charge a patient on behalf of, or refer a patient to, any organization in which the physician has a “significant beneficial interest” unless the physician first discloses in writing to the patient
    • o Health and Safety Code section 24173
      • A physician who plans to conduct a medical experiment on a patient must, among other things, inform the patient of the name of the sponsor or funding source
    • o No law prohibits a physician from conducting research in the same area in which he practices
    • o Yet a physician who treats a patient in whom he also has a research interest has potentially conflicting loyalties
    • o A physician who adds his own research interests to this balance may be tempted to order a scientifically useful procedure or test that offers marginal, or no, benefits to the patient
    • o The possibility that an interest extraneous to the patient’s health has affected the physician’s judgment is something that a reasonable patient would want to know in deciding whether to consent to a proposed course of treatment
    • o It is material to the patient’s decision and, thus, a prerequisite to inform consent
    • o California law does not grant physicians unlimited discretion to decide what to disclose
    • o Instead, “it is the prerogative of the patient, not the physician, to determine for himself the direction in which he believes his interest lies
    • o Accordingly, we hold that a physician who is seeking a patient’s consent for a medical procedure must, in order to satisfy his fiduciary duty and to obtain the patient’s health, whether research or economic, that may affect his medical judgement
  • Conclusion
    • o Moore alleges that, prior to the surgical removal of his spleen, Golde “formed the intent and made arrangements to obtain portions of his spleen following its removal from Moore in connection with his desire to have regular and continuous access to, and possession of Moore’s unique and rare Blood and Bodily Substances
    • o Moore was never informed prior to the surgery of Golde’s “prior formed intent” to obtain a portion of his spleen
    • o These allegations adequately show that Golde had an undisclosed research interest in Moore’s cells at the time he sought Moore’s consent to the surgery
    • o Moore has stated a cause of action for breach of fiduciary duty, or lack of informed consent, based upon the disclosures accompanying that medical procedure
    • o The court held that the plaintiff could state a cause of action based on Golde’s alleged failure to disclosure his research interest before the surgery.
    • o It also held that the surgery had a therapeutic purpose
    • o Even if the surgery had a therapeutic purpose, it does not follow that Golde had no duty to disclose his additional research and economic interests.
    • o The existence of a motivation for a medical procedure unrelated to the patient’s health is a potential conflict of interest and a fact material to the patient’s decision
  • Experimental procedures the “most frequent risks and hazards” will remain unknown until the procedure becomes established
  • If the health care provider has a duty to inform of known risks for established procedures, common sense and the purposes of the statute equally require that the health care provider inform the patient of any uncertainty regarding the risks associated with experimental procedures
  • Physician Payment Sunshine Act
    • o ACA included two provisions regarding the disclosure of physician financial interests related to treatment of patients
      • The first creates a publicly accessible data base on industry payments made to physicians
      • The second requires that physicians disclose certain ownership interests to patients
    • The Sunshine Act raises a number of interesting questions:
      • o The first is whether the patient awareness of physician receipt of industry payments affects patient trust in their physicians, or how they shop for physicians generally
      • o Second, whether the assumptions of the Act are realistic

M. Canterbury v. spence (causation complexities)[edit]

  • Causation can only be established if there is a link between the failure of a doctor to disclose and the patient’s injury
  • Two separate showings are required to establish causation
    • o The plaintiff must establish “decision-causation” that the physician’s failure to disclose information caused the patient’s consent
    • o The plaintiff must show that “injury-causation” that the consented-to procedure actually caused harm

N. confidentiality and disclosure in the physician-patient relationship[edit]

  • One of the most important obligations owed by a professional to a patient is the protection of confidences revealed by the patient to the professional
  • State courts have developed common law rules to protect these confidences, and most states have adopted either a comprehensive medical confidentiality statute or several statutes addressing specific types of medical information

O. Humphers v. first interstate bank of oregon supreme court of oregon, 1985 (Breaches of confidentiality)[edit]

  • Facts
    • o Ramona Jean Peek gave birth to a daughter in St. Charles Medical Center in Bend, OR in 1959
    • o She was unmarried
    • o Her physician registered her at the hospital as Mrs. Jean Smith
    • o The next day she consented to the child’s adoption by Leslie and Shirley Swarens of Bend
    • o Child was named Leslie Dawn
    • o Birth records were sealed and marked to show that they were not public
    • o Ramona got remarried and raised a family
    • o Only her mother, husband, and the doctor knew about the daughter she had given up
    • o Twenty-one years later, daughter now known as Dawn Kastning wished to establish contact with her mother
    • o Could not gain access to confidential file of her adoption, reached out to Dr. Mackey and he agreed to assist
    • o Mackey gave Dawn a letter which stated that he had registered Ramona Jean Peek at the hospital
    • o He remembered administering diethylstilbestrol to her and that the possible consequences made it important for Dawn to find her mother
    • o Later on it was found to be false just so Dawn could breach the confidentiality record
    • o 1982, hospital personnel allowed Dawn to make copies of her records because of Mackey’s letter
    • o She was able to locate Ramona
    • o Ramona was not pleased
    • o The unexpected development upset her and caused her emotional distress, worry, sleeplessness, humiliation, embarrassment, and inability to function normally
    • o She sought damages from his estate because he had died
    • o Her complaint pleads relief on five different theories:
      • Mackey incurred liability for “outrageous conduct”
      • His disclosure of a professional secret fell short of the care, skill, and diligence employed by other physicians in the community and commanded by statutes
      • His disclosure wrongfully breached a confidential or privileged relationship
      • His disclosure of confidential information was an “invasion of privacy” in the form of an “unauthorized intrusion upon plaintiff’s seclusion, solitude, and private affairs
      • His disclosures to Dawn Kastning breached a contractual obligation of the secrecy
    • Issue:
      • o Did Dr. Mackey breach his professional duty to keep plaintiff’s secret when it appeared that he provided Dawn with the information of Ramona?
    • Analysis:
      • o The circuit court granted defendant’s motion to dismiss the complaint on the grounds that the facts fell short of each theory
      • o The Court of Appeal affirmed the dismissal of the first, second, and fifth counts but reversed the third and fourth
      • o Breach by Mackey of a professional duty to keep plaintiff’s secret rather than from a violation of plaintiff’s privacy
    • Conclusion:
      • o Plaintiff did not pursue her other theories and we express no value whether the dismissal of those counts was correct
      • o The point of the claim against Mackey is not that he pried into a confidence, but he failed to keep one
      • o We agree with the Court of Appeals that plaintiff may proceed under her claim of breach of confidentiality in a confidential relationship
      • o The decision of the Court of Appeals is reversed with respect to plaintiff’s claim of breach of confidence in a confidential relationship, and the case is remanded to the circuit court for further proceeding on the claim

P. Privacy[edit]

  • The most important distinction is that only one who holds information in confidence can be charged with a breach of confidence
  • If an act qualifies as a tortious invasion of privacy, it theoretically could be committed by anyone

Q. breach of confidence[edit]

  • A number of decisions have held that unauthorized and unprivileged disclosures of confidential information obtained in a confidential relationship can give rise to tort damages
  • Even without such a legal obligation, there may be a privilege to disclose information for the safety of individuals or important to the public in matters of public interest
  • A physician’s duty to keep medical and related information about a patient in confidence is beyond question, it is imposed by statutes
  • ORS 677.190(5) provides for disqualifying or otherwise disciplining a physician for “willfully or negligently divulging a professional secret”
  • Medical records often play a pivotal role in medical malpractice cases
  • Medical records, if properly authenticated, will usually be admitted under the business records exception to the hearsay rule

R. doe v. medlantic health care group, inc d.c court of appeals, 2003[edit]

  • Facts:
    • o 1996, Doe held two jobs
    • o By day he worked for a federal agency, by night he was a janitor for a company that contracted to clean the Department of State
    • o Doe was diagnosed with HIV in 8/1995
    • o He had not told anyone at his janitorial job that he was HIV positive
    • o Doe’s co-workers in the evenings at the State Department was Tijuana Goldring
    • o She also held a day position as a temporary receptionist at Washington Hospital Center (WHC)
    • o 4/13/1996 Doe went to WHC emergency room suffering from severe headaches, nausea and high fever
    • o He was discharged on 4/16/1996
    • o Was not able to return to work for approximately two weeks because of these health problems
    • o On 4/23/1996, while still absent from work, DOE returned to WHC for a follow-up clinic visit.
    • o Knowing that Goldring worked at WHC, he stopped by after his discharge to pay her a courtesy call
    • o After talking, Goldring asked him for the correct spelling of his last name so she could send him a get-well card
    • o Doe testified that he did not think Goldring’s request was odd
    • o Doe never received a card from Goldring but did receive a card from fellow co-workers with $50 enclosed
    • o Sometimes in April of 1996, before Doe returned to work, Goldring told another co-worker at the State Department, Donnell Fuell that Doe “had that shit,” meaning HIV or AIDS
    • o Fuell questioned her veracity and Goldring replied that it was “for real” and told Fuell that she “got it from the hospital”
    • o Fuell knew that Goldring worked at the hospital during the day
    • o Doe stipulated that within “a couple of days” of his conversation with Goldring, on 4/23 he learned that his co-workers at State knew of his AIDS diagnosis
    • o 4/25/1996, Doe went to the State to collect his paycheck
    • o Encountered Derek Nelson and Gordon Bannister
    • o Nelson stated, “Hey motherfucker, I hear you’re dying of AIDS.”
    • o Doe responded, “Do I look like I’m dying?”
    • o Leaving the building, Doe saw Fuell, who told him that Tijuana was “going around telling everybody you got AIDS”
    • o That weekend, Doe called Willie Jones, a co-worker and friend from the State if she heard any rumors at work that he had AIDS, Jones stated she had
    • o Doe did not ask Fuell and Jones where they heard the rumor
    • o Doe testified that it was like he was living in hell
    • o On 5/21/1996, Doe called WHC and spoke with the vice president of personnel and human resource and asked about a policy on employees who disseminate confidential information
    • o Doe explained what happened and gave Goldring’s name
    • o He was told that they would talk to Goldring and that it was against hospital policy, and was referred to the “risk management” department
  • Issues:
    • o
  • Analysis:
    • o Doe filed a complaint against Medlantic and Goldring on 5/20/1997
    • o Alleging tort claims of invasion of privacy based on Goldring’s disclosure and breach of confidential relationship based on WHC’s negligence in permitting Goldring’s access to confidential patient information
    • o Goldring was dismissed from case
    • o Proceeded to trial against Midlantic
    • o Jury found Midlantic liable for breach of confidential relationship and awarded damages in the amount of $250,000
  • Conclusion:
    • o We agree with the trial court that the evidence, viewed in the light most favorable to the plaintiff
    • o Sufficed to permit the jury to find that WHC breached its duty to “observe the utmost caution” in protecting the confidentiality of Doe’s medical record
    • o The jury was instructed that it could take into account whether the hospital’s protocol “is or is not followed in practice” and “whether it was successful historically in preventing unauthorized disclosures”
    • o Evidence also presented that Goldring was a receptionist at the Employee Health department in April 1996 and that, of all Doe’s co-workers, she alone could have access to his medical records
    • o Goldring was the source of the unauthorized disclosure. Sufficed to permit the jury to conclude that the hospital breached its duty as a fiduciary to maintain the confidentiality of Doe’s medical record
    • o For the ongoing reasons, the trial court’s entry of judgement for appellee is reversed, and the case is remanded with instructions that the jury verdict be reinstated, and judgement entered in favor of appellant

S. federal medical privacy standards under hipaa[edit]

  • The most prominent legal requirements for the privacy and security of health information stem from the federal Health Insurance Portability and Accountability ACT of 1996 (HIPAA)
  • HIPAA Privacy Rule answers the following questions:
    • o Who does the privacy rule apply to?
    • o What information is protected by the Privacy Rule? What about information that is de-identified?
    • o What is the general rule regarding information subject to the Privacy Rule?
    • o The Privacy Rule breaks down uses and disclosures into three categories:
      • Those that are required
      • Those permitted without authorization
      • Those that require authorization. What are the key examples of uses and disclosures that fall into each category?

T. standards for privacy of individually identifiable health information[edit]

  • The regulation has three major purposes:
    • o To protect and enhance the rights of consumers by providing them access to their health information and controlling the inappropriate use of that information
    • o To improve the quality of health care in the U.S by restoring trust in the health care industry among consumers, health care professionals, and the multitude of organizations and individuals committed to the delivery of care
    • o To improve the efficiency and effectiveness of health care delivery by creating a national framework for health privacy protection that builds on efforts by states, health system, and individual organizations and individuals
  • Many states have adopted laws that protect the health information relating to certain health conditions such as mental illness, communicable diseases, cancer, HIV/AIDS, and other stigmatized conditions
  • Many state rules fail to provide such basic protections as ensuring a patient’s legal right to see a copy of his or her medical record
  • For the first time, a set of basic national privacy standards and fair information practices that provides all Americans with a basic level of protection and peace of mind that is essential to their full participation in care

U. Rights of individuals[edit]

  • Notice of Privacy Practices (Protected Health Information, PHI)
    • o Access to PHI
      • Individuals and their personal representatives have the right to access and obtain a copy of their PHI in a covered entity’s “designated record set”
    • o Amendment of PHI
      • Individuals have the right to request amendments or correction to their PHI
    • o Accounting for Disclosures
      • Individuals have a right to an accounting of disclosures of their PHI by covered entities and business associates made in the prior six years
    • o Payment in Cash to AVOID PHI Sharing with Health Plans
      • When individuals pay by cash, they can instruct their provider not to share information about their treatment with their health plan
      • Physicians worry however that this may mean, in the case of diseases like HIV/AIDS, that specialists will not have access to essential patient information, defeating the purpose of the electronic health record, and putting the patient at risk of inadequate care

V. enforcement and penalties for noncompliance[edit]

  • Civil Monetary Penalties
    • o The 2013 Omnibus HIPAA Rule substantially increased the potential civil monetary fines for violations for covered entities and business associates, and established tiers of escalating penalty amounts based on increasing degrees of culpability of violators and other responsible parties, ranging from unknowing violation to willful neglect
  • Criminal Penalties
    • o A person who knowingly obtains or discloses individually identifiable health information in violation of HIPAA faces a fine of $50,000 and up to one-year imprisonment
  • Breach
    • o Breaches are impermissible uses, access to, or disclosures of PHI that compromise the privacy or security of the information
  • Breach Notification
    • o Covered entities and business associates must notify affected individuals of a breach of their unsecured PHI
  • The “Wall of Shame”
    • o In addition to notifying the individuals and the media, covered entities must notify the Secretary of HHS of the breaches involving more than 500 individuals within 60 days of its discovery
    • o Breaches affecting fewer than 500 individuals are reported to the Secretary in an annual report
  • Marketing Rules
    • o Marketing broadly applies to any communications about a product or service that encourages a recipient to purchase or use the product or service
    • o Exception to the definition of marketing include any communication that is made
      • To provide refill reminders or information regarding a drug that is currently being prescribed, as long as any financial remuneration received by the covered entity is “reasonably related” to the cost related the marketing
      • Regarding the product or service of a third party for certain treatment or operation purposes, except where financial remuneration is involved
    • Health Information Exchanges
      • o The HITECH Act provided federal grants to the states to establish statewide health information exchanges (HIEs) to promote quality and efficiency gains that are expected from electronic medical records
      • o Under the HITECH amendments to HIPAA, the HIE is obliged to protect patient privacy by assuring that disclosure of and access to patient health information meets, at a minimum, HIPAA standards

W. Byrne v. Avery Center for Obstetrics and Gynocology Supreme Court of Conn, 2014 (opinion)[edit]

  • Facts:
    • o 5/2004, Plaintiff began a personal relationship with Andro Mendoza
    • o Lasted until 9/2004
    • o 10/2004 plaintiff instructed defendant to not release her medical record to Mendoza
    • o 3/2005 moved from Connecticut to Vermont and currently resides
    • o 5/31/2005, Mendoza filed paternity actions against the plaintiff in Connecticut and Vermont
    • o The defendant was served with a subpoena requesting its presence together with the plaintiff’s medical records at the New Haven Regional Children’s [Probate Court] on 7/12/2005
    • o The defendant did not alert the plaintiff of the subpoena, file a motion to quash it or appear in court
    • o Rather the defendant mailed a copy of the plaintiff’s medical file to the court around 7/12/2005
    • o 09/15/2005, Mendoza informed the plaintiff by phone that he reviewed the plaintiff’s medical file in the court file
    • o 9/15/2005, the plaintiff filed a motion to seal her medical records, which was granted
    • o The plaintiff subsequently brought action against the defendant. Specifically, the operative complaint in the present case alleges that the defendant:
      • Breached its contract with her when it violated its privacy policy by disclosing her protected health information without authorization
      • Acted negligently by failing to use proper and reasonable care in protecting her medical file, including disclosing it without authorization in violation of the General Statutes and the department’s regulations implementing HIPAA
      • Made a negligent misrepresentation, upon which the plaintiff relied to her detriment, that her “medical file and the privacy of her health information would be protected in accordance with the law”
      • Engaged in conduct constituting negligent infliction of emotional distress
    • Issues:
    • Analysis:
      • o The trial court agreed with the defendant’s contention that “HIPAA preempts ‘any action dealing with confidentiality/privacy of medical information”
      • o The trial court then rejected the plaintiff’s claim that she had not utilized HIPAA as the basis of her cause for action, but rather, relied on it as “evidence of the appropriate standard of care” for claims brought under state law, namely, negligence
      • o Plaintiff has labeled her claims as negligence claims, but this does not change their essential nature, they are HIPAA claims
      • o Thus, the plaintiff’s state statutory claim “amounted to a claim of HIPAA violation, a claim for which there is no private right of action
    • Conclusion
      • o On appeal, the plaintiff claims that the trial court improperly determined that HIPAA preempted her negligence-based state law claims
      • o Plaintiff asserts that she is not asserting a claim for relief premised solely on a violation of HIPAA, but rather, relies heavily on Merrell Dow Pharm, Inc. v. Thompson
      • o “A plaintiff cannot use a violation of HIPAA as the standard of care for the underlying claims, such as negligence
      • o The defendant further emphasizes that the plaintiff’s negligence claim relying on Section 52-146o is preempted because HIPAA is more stringent than the state statute
      • o Connecticut’s common law recognizes a negligence cause of action arising from health care providers’ breaches of patient privacy in the context of complying with subpoenas, we agree with the plaintiff and conclude that such an action is not preempted by HIPAA and, further, that the HIPAA regulations may well inform the applicable standard of care in certain circumstances
      • o Accordingly, we conclude that the trial court improperly dismissed counts two and four of the plaintiff’s complaint, sounding in negligence and negligent infliction of emotional distress
      • o The judgement is reversed, and the case is remanded to the trial court for further proceedings according to the law

X. V. drug detailing and state regulations[edit]

  • Pharmaceutical manufacturers promote their drugs to doctors through a process called “detailing”
  • This often involves a scheduled visit to the doctor’s office to persuade the doctor to prescribe a particular pharmaceutical
  • Detailers bring drug samples as well as medical studies that explain the “details” and potential advantages of various prescription drugs
  • “Prescriber-identifying information” enables a detailer better to ascertain which doctors are likely to be interested in a particular drug and how best to present a particular sales message
  • Detailing is an expensive undertaking, so pharmaceutical companies often use it to promote high-profit brand-name drugs protected by patent
  • Once a brand-name drug’s patent expires, less expensive bioequivalent generic alternatives are manufactured and sold
  • Data Miners
    • o Lease these reports to pharmaceutical manufacturers subject to nondisclosure agreements
    • o Detailers, who represent the manufacturers, then use the reports to refine their marketing tactics and increase sales

5. Health law -Chapter 5 liability of health care professionals[edit]

  • According to the Institute of Medicine (IOM):
    • o At least 44,000 Americans die each year as a result of medical errors
    • o That number may be as high as 98,000
    • o Even when using the lower estimate, deaths due to medical errors exceed the numbers attributable to the 8th leading cause of death
  • The IOM Report goes on to estimate that adverse events and medical error cost the nation between $17 billion and $29 billion
  • The IOM Report defines an adverse event as “an injury caused by medical management rather than the underlying condition of the patient” and a medical error as “the failure of a planned action to be completed as intended
  • Until recently, malpractice cases were brought against the treating physician and not the institution in which care was provided because of a variety of legal rules that shielded hospitals
  • ACA Section 301 mandates the Director of the Center for Quality Improvement Programs to identify, develop, evaluate, disseminate, and provide training in innovative methodologies and strategies for quality improvement practices in the delivery of health care services that represent best practices in health care quality, safety, and value

A. Hall v. Hilbun Supreme court of miss., 1985 (the standard of care, establishing the standard of care)[edit]

  • Facts:
    • o Terry O. Hall was admitted to the Singing River Hospital in Jackson County, Miss. In the early morning of 5/8/1978 complaining of abdominal discomfort
    • o Her physician, DR. Ward requested Dr. Hilbun, a general surgeon to enter the case as a consultation
    • o Examination suggested that the discomfort was caused by the obstruction of the small bowel
    • o Hillbun recommended an exploratory laparotomy
    • o Consent was given and Hilbun performed the surgery about noon on 5/20/1978 with apparent success
    • o Following surgery, Hall was moved to a recovery room and 1:35 p.m where Hilbun remained in attendance with her until about 2:50 p.m.
    • o At the time Hall was alert and communicating with him
    • o All vital signs were stable, and Hall was then moved to a private room where she expired 14 hours later
    • o Hall testified that he remained with his wife in her hospital room from the time of her arrival from the recovery room at approximately 3:00 p.m. on 5/20/1978, until she ultimately expired at approximately 5:00 a.m. on the morning of 5/21
    • o Hall stated that his wife complained of pain at 9:00 p.m. and was given morphine for relief
    • o Hall awakened and again complained of pain in her abdomen and requested a sedative, which was administered following which she fell asleep
    • o Hall experienced further difficulty in breathing, and her husband reported this, too
    • o Hilbun was called and came to the hospital immediately only to find his patient had expired
    • o The cause of her death was subsequently determined to be adult respiratory distress syndrome (cardio respiratory failure)
    • o The autopsy performed upon Hall’s body revealed the cause of death and additionally, disclosed that a laparotomy sponge has been left in the patient’s abdominal cavity
    • o The evidence, however, without contradiction establishes that the sponge did not contribute to Hall’s death
    • o The sponge may have caused illness
    • o Hilbun did not give instructions to the hospital staff before he retired for the night
  • Analysis:
    • o Hillbun explained that the post-operative orders were noted on the record out of the courtesy by Dr. Judy Fabian, the anesthesiologist on the case
    • o Hilbun stated that such orders were customarily approved by his signature or he would add or subtract from the record to reflect the exact situation
    • o Hilbun testified that he checked on Hall in the recovery room and stayed with her, took her vital signs, and discharged her to the floor
    • o He confirmed that he customarily followed his patient postoperatively until the patient leaves the hospital
    • o Hilbun had no contact with Hall after 3 p.m. on 5/29, 14 hours later she was dead
    • o The plaintiff called Dr. Hoerr, a retired surgeon of Cleveland, Ohio was an expert witness and stated that
      • In his opinion, Hall did not receive the type of care that she should have received from the general surgical specialist and Hilbun was negligent on not following his patients
    • o The trial court ruled that Dr. Hoerr was not qualified to give an opinion as to whether Hilbun post-operative regimen departed from the obligatory standard of care
  • Conclusion:
    • o Hoerr and Sachs’ testimonies were excluded, and the Plaintiff had failed to present a legally sufficient quantum of evidence to establish a prima facia. The Circuit Court granted the motion
  • Physicians are far more mobile than they once were
  • They frequently attend medical school in one state, do residency in another, establish practice in a third and after a period of time relocate to a fourth
  • All the while, they have ready access to professional and scientific journals and seminars for continuing medical education from across the country
  • In the care and treatment of each patient, each physician has a nondelegable duty to render professional services consistent with that objectively ascertained minimally acceptable level of expertise he holds himself out as possessing and given the circumstances of the particular case
  • The professional services contemplated, within this duty concern the entire caring process, including but not limited to examination, history, testing, diagnosis, course of treatment, medication, surgery, follow-up, and after-care and the like
  • A physician may incur civil liability only when the quality of care he renders (including his judgement calls) falls below minimally acceptable levels
  • Different medical judgements are made by physicians whose offices are across the street from one another
  • Comparable differences in medical judgement or opinion exist among physicians geographically separated by much greater distances, and in the sense local custom does not and must continue to play a role within our law, albeit a limited one
  • The Resources-Based Caveat to the National Standard of Care
    • o Takes two forms
      • A duty to render a quality of care consonant with the level of medical and practical knowledge the physician may reasonably be expected to possess and the medical judgement he may be expected to exercise
      • A duty based upon the adept use of such medical facilities, services, equipment and options as are reasonably available
    • Who May Qualify as Expert Medical Witness in Malpractice Case: A rule of evidence:
      • o Medical malpractice cases generally require expert witnesses to assist the trier of fact to understand the evidence
      • o In view of the refinements in the physician’s duty of care, we hold that a qualified medical expert witness may without more express an opinion regarding the meaning and import of the duty of care, given the peculiar circumstances of the case
      • o Before the witness may go further, he must be familiarized with the facilities, resources, services and options available
      • o The qualified medical expert witness may express an opinion what the care duty of the defendant physician was and whether the acts or omissions of the defendant physician were in compliance with, or fell substantially short of compliance with, that duty
      • o Plaintiff’s experts normally must be in the same specialty as the defendant
      • o Sometimes, however, courts have allowed physicians in other specialties to testify so long as the alleged negligence involved matters within the knowledge of every physician

B. b. practice guidelines as standards of care[edit]

  • Much of American medical practice does not improve health
  • Evidence-based medicine (EBM) and comparative effectiveness research (CER) have developed in response to an absence of data to drive medical practice, reduce variation, and better assure that treatments are both necessary and effective
  • EBM is “the conscientious, explicit, and judicious use of the current best evidence in making decisions about the care of individual patients”
  • The goal of EBM and CER is to narrow variation in medical practice by developing guidelines and best practices for clinicians
  • The development of clinical guidelines has forced courts to determine the value of those guidelines as relevant, if not conclusive, evidence of the standard of care

C. Conn v. United States U.S. District Court, Southern District of Miss, 2012[edit]

  • Fact:
    • o 2/10/2009, John Conn was suffering from chest pains
    • o He visited the Stone County Hospital
    • o Soon transferred to the G.V “Sonny” Montgomery V.A. Medical Center in Jackson, Mississippi
    • o By the time he arrived at the V.A, his chest pain had subsided
    • o But he had a troponin I value of 0.17 and some nonspecific EKG changes
    • o That afternoon, an EKG showed an incomplete right bundle branch block
    • o A noted to consider ECHO in the am
    • o VA kept Conn overnight for observation, and during the bight his troponin I began to trend down
    • o Conn had no episode overnight
    • o Conn told the VA he had gone stress test the prior year and was placed on omeprazole 40 mg po for possible GERD
    • o VA discharged Conn after one night and recorded that he was “asymptomatic”
    • o He never underwent and ECHO test
    • o Unbeknownst to Conn or the VA, Conn had a 90% blockage in his left descending artery
    • o Two days later, Conn returned to the Stone County Hospital with chest pains
    • o He suffered a massive heart attack and had to be shocked back to life after flat lining
  • Conn’s Expert Report
    • o Conn and his wife filed suit against the Unites States Government for medical malpractice
    • o Conn submitted his medical record to Dr. Mark Strong, who reviewed the records and submitted an expert report
    • o According to Strong, Conn’s elevated troponin levels and irregular EKG readings leave “no question that Mr. Conn suffered an acute myocardial infarcation the morning of 2/10/09
    • o Strong wrote that the VA’s course of treatment was “not appropriate” and “was not treated with what the American College of Cardiology, American Heart Association recommend for an acute myocardial infarcation
    • o The most concerning aspect was the nature of his discharge from the facility
    • o Strong concluded that Conn’s “underlying coronary artery disease” was clearly evident and should have been diagnosed on 2/10/09
  • Analysis:
    • o Controlling Law:
      • The Government moved for summary judgement on 6/15/2012
      • The Government argues that Strong’s report failed on three respects:
        • It offers no standard of care
        • It does not show that the VA breached the standard of care
        • That it does not establish that the breach caused Conn’s injuries
      • o Negligence suits against the federal government are controlled by the Federal Tort Claims Act, and they are evaluated “in accordance with the law of the place where the act or omission occurred”
      • o In Mississippi, a plaintiff in a medical malpractice case must prove, among other things, that a standard of care governed his physician’s actions
      • o The standard of care must be “specific” and at its core, it is a requirement that a physician be “minimally competent” in his practice
      • o According to the Government, Strong’s report attempts failed to establish a standard of care at three separate points
        • First, in the Government’s view, Strong’s reliance on “what the American College of Cardiology, American Heart Association recommend for an acute myocardial infarction” merely represents “the standard suggested by one group of cardiologists” and does not state an objective standard of care
        • Second. The Government argues that Strong’s report mistakenly attempts to delineate a standard of care by explaining “what his personal treatment choice may have been”
        • Third, the Government contends that Strong’s report is vague
      • Conclusion:
        • o Because Conn has failed to produce an expert report that establishes an objective standard of care to which the VA should have adhered, he has failed to establish a prima facie case for medical malpractice
        • o Therefore, the Government’s motion for summary judgment is granted
        • o A final judgement will be entered to memorialize the decision

D. C. physician duties to contest reimbursement limits[edit]

  • The group setting gives doctors backup coverage, allows them more time off, and lets them coordinate care for their patients, but it also reduces their independence
  • The ACA provides incentives for physicians to be employed in new group settings, such as ACOs or Medical Homes, and by hospitals
  • Heavy pressure is put on physicians to reduce diagnostic tests, control lengths of stay in the hospitals, and trim the fat out of medical practice
  • A physician may have an obligation to assist patients in obtaining payment for health care
  • No court would require a physician to pay out of pocket for a treatment that a patient needs; there is no “duty to rescue”

E. Wickline v. State Court of Appeal, Second District, CA 1986[edit]

  • Facts:
    • o Wickline was a woman in her 40s and was treated in 1976 by Dr. Daniels, a physician in general family practice
    • o Failed to respond to physical therapy and admitted to Van Nuys Community Hospital
    • o Examined by Dr. Polonsky, a specialist in peripheral vascular surgery
    • o Was diagnosed Leriche’s Syndrome, a condition caused by the obstruction of the terminal aorta due to arteriosclerosis
    • o He recommended surgery
    • o Wickline was eligible for Medi-Cal
    • o Daniels submitted a treatment authorization request to Medi-Cal, which authorized surgery and 10 days of hospital stay
    • o Polonsky performed the surgery, developed a clot and second surgery was performed
    • o Surgeries were described as “stormy”
    • o Wickline was scheduled to leave 1/17/1977
    • o Polonsky decided on 1/16/1977, however that it was “medically necessary” for her to remain in the hospital for another eight days beyond the scheduled discharge date
    • o He filed a Medi-Cal form 180
    • o The nurse, Doris Futerman, felt that she should not approve the entire 8-day extension
    • o Phoned the Medi-Cal consultant, Dr. Glassman, a board-certified surgeon, he rejected Wickline’s physician’s request and authorized only 4 days beyond the original discharge date
    • o Both doctors each wrote discharge orders based on the limited 4-day extensions
  • Analysis:
    • o Lois J. Wickline sued defendant, State of CA/Medi-Cal
    • o Between 1/6/1977 and 1/21/1977, Doe I an employee of the State of CA, while acting in the scope of employment, negligently discontinued plaintiff’s Medi-Cal eligibility
    • o Thus, causing plaintiff to be discharged from Van Nuys Community Hospital prematurely and while in need of continuing hospital care
    • o As a result, plaintiff suffered a complete occlusion of the right infrarenal aorta, necessitating an amputation of the right leg
    • o In that system the third-party payor reviewed the patient’s chart after the fact to determine whether the treatment provided was medically necessary
    • o In the judgment of the utilization reviewer, it was not, the health care provider’s claim for payment was denied
    • o Authority for the rendering of health care services must be obtained before medical care is rendered
    • o While all three doctors stated that they could obtain an extension, none of them did so
    • o Polonsky testified that at the time of the issue, he felt that Medi-Cal Consultants had the State’s interest more in mind than the patient’s welfare and that that belief influenced his decision not to request a second extension
    • o Medical experts in the case agreed that Polonsky was within the standard of practice in discharging Wickline on 1/21
    • o She was ordered by to the hospital on 1/30, nine days after discharge
    • o 2/8, Polonsky amputated Wickline’s leg below the knee to save her life
    • o 2/17, because of the failure to heal, her leg was amputated above the knee
    • o Polonsky testified that if she had remained in the hospital, he would have observed the leg’s change in color, realized that a clot had formed, and ordered her back into surgery to reopen the graft to remove the clot
    • o Medi-Cal Consultant’s rejection of the requested 8-day extension of acute care hospitalization and his authorization of a 4-day extension in its place did not conform to the usual medical standards as they existed in 1977
    • o A physician would not be permitted to make decisions regarding the care of a patient without either first seeing the patient, reviewing the patient’s chart or discussing the patient’s condition with her treating physician(s)
    • o It argues that Medi-Cal had no part in the plaintiff’s hospital discharge and therefore was not liable even if the decision to do so was erroneously made by her doctors
  • Conclusion:
    • o The court examined the negligence liability rules in CA, concluded that Medi-Cal is absolved from liability in this case
    • o Kaufman, chief Medic-Cal Consultant for the Los Angeles field office, was called to testify on behalf of the defendant
    • o Kaufman also stated that Medi-Cal Consultants did not initiate telephone calls to patient’s treating doctors because of the volume of work they already had in meeting their prescribed responsibilities
    • o It was for the patient’s treating physician to decide the course of treatment that was medically necessary to treat the ailment
    • o It was also the physician’s responsibility to determine whether or not acute care hospitalization was required and for how long
    • o Finally, it was agreed that the patient’s physician is in a better position than the Medi-Cal Consultant to determine the number of days medically necessary for any required hospital care
    • o The decision to discharge is, therefore, the responsibility of the patient’s own treating doctor
    • o Medi-Cal would expect those physicians to make such a request if they felt that it was indicated, and upon receipt of such a request further consideration of an additional extension of hospital time would have been given
    • o The patient who requires treatment and who is harmed when care which should have been provided is not provided should recover for the injuries suffered from all those responsible for the deprivation of such care, including, when appropriate, health care payors
    • o If, in his medical judgement, it was in his patient’s best interest that she remains in the acute care hospital setting for an additional four days beyond the extended time period originally authorized by Medi-Cal, Polansky should have made some effort to keep Wickline there
    • o It as his medical judgment, however, that Wickline could be discharged when she was
    • o Wickline met the standard of care applicable at the time
    • o Medi-Cal was not a party to that medical decision and therefore cannot be held share in the harm resulting if such decision was negligently made
    • o Medi-Cal did not override the medical judgement of Wickline’s treating physicians at the time of her discharge
    • o For the reasons expressed herein, this court finds that appellant is not liable for respondent’s injuries as a matter of law
    • o That makes unnecessary any discussion of the other contentions of the parties
    • o Judgement is reversed

6. Health law -Chapter 9 Health care reform: the policy context[edit]

  • Many policymakers pursuing health reforms have assumed that the market for health care operated like most other markets for goods and services in a market-based economic system
  • Attempts to remedy imperfections in the market, such as inadequate coverage or excessive costs, have largely focused on promoting competition
  • Nonetheless, the market for healthcare remains highly dysfunctional
  • As the result, the United States spends more on health care than it would in a competitive market subject to less waste and inefficiency
  • Americans do not need to spend as much as they do to retain the amount and quality of care, they receive

A. congressional budget office, economic implications of rising health care cost[edit]

  • Free markets provide an efficient mechanism for allocating resources in the economy
  • Efficiency, however, free markers must operate under certain conditions
  • Works best when consumers have good information about the characteristics of products and their prices
  • Information that is most easily obtained if products are well defined and standardized and if prices can be readily ascertained without excessive search
  • Market efficiency requires that a large number of sellers compete with each other over prices that reflect true resource costs
  • With large sellers, no single vendor has the power to control prices
  • Price competition among sellers lowers prices to the point that they reflect the marginal costs of production
  • The market for health care, however, does not meet any of these conditions…
  • Consumers lack key information about the quality and price of medical services
  • Their ignorance about quality has two dimensions:
    • o First, most consumers do not have the expertise they need to evaluate the qualifications of their health care providers
    • o Second, when consumers need medical care, they may not have information (independent of what they are told by provider) about the full range of alternative treatments and the prospective outcomes of these alternatives
  • Consumers also lack rudimentary information about the prices of the medical care they buy and have difficulty assessing what that price information means
  • Price information are not available to patients in advance of treatment
  • Prices of physician’s services are not advertised
  • Sometimes, even the doctors do not know the full cost of treatment, especially if it requires hospitalization of drugs
  • Although a patient can acquire some prove information with repeated visits to a doctor, many reasons for seeing a doctor do not occur again
  • Even if the price information is available, it may be difficult to interpret
  • Without information on quality, price information has no meaning
  • Because consumers delegate a considerable amount of decision-making authority to their physicians, medical practitioners act both as agents for consumers and suppliers of medical services
  • Because of such power, physicians are in the position to create a demand for their own services
  • Physicians’ training and professional standards strongly predispose them to use their power to give the best possible medical care without regard to cost
  • Efficient use of medical resources requires consumers and providers to weight the costs and benefits of alternative medical treatments
  • More important, good statistical information concerning the effectiveness of many treatments, even common treatments is simply not available
  • The lack of good information on the outcomes of many medical treatments has created an environment in which the doctors’ preferences for particular procedures-rather than science-appear to determine how they are used
  • A situation that leads to significant variations in the patterns and costs of medical care around the country
  • For markets to allocate resources efficiently, sellers must actively compete
  • In competitive environment, individual vendors have no control over the price of what they sell or over the number of the competitors
  • Also, more efficient suppliers can offer lower prices than those who fail to control their cost
  • Although there are many providers in the health care sector, they do not always compete effectively on price
  • The type of competition, however, can tend to increase costs
  • Once a new technology is introduced, it tends to be used regardless of cost
  • The presence of third-party payers dulls the incentives for consumers to pay much attention to costs at the point of services
  • The tax subsidy for employment-based insurance… also reduces some of the pressures on workers to pay much attention to costs of insurance
  • Difficulties in accessing information about the quality of doctors weaken the already weak incentives for consumers to seek out the lowest cost providers
  • May consumers have long standing relationships with their physicians and may be reluctant to switch doctors to save money
  • Economists use the term “rents” to describe a situation in which the returns to labor or capital are above the returns needed to attract the appropriate supply of resources to an activity
  • It seems likely that physicians earn rents to their profession for two reasons
    • o First, the number of qualified applicants for medical school is far greater than the number of student slot available, so the entry limits probably matter
    • o Second, studies of the financial returns from education and training suggest that the private returns on an investment in medical school compare favorably with the returns on investments in general and exceed the returns in most other occupations
  • The bulk of medical care is purchased through third-party payers
    • o Private insurance
    • o Federal
    • o State
    • o Local governments
  • In addition, physicians in the US earn about five- and one-half times the average annual compensation of other wage earners
  • The gap is smaller in other countries
  • Individual’s need for major medical care occurs largely by chance and is difficult to predict
  • Most types of illnesses are statistically predictable, however, for groups of individuals
  • Health insurance enables consumers to take advantage of this group predictability by pooling their risks for serious accidents or diseases
  • Sick individuals and their doctors have every incentive to buy expensive treatments and tests as long as they do any good at all, because the patient does not bear much of the cost
  • The government subsidize health care, which allows some consumers greater access to medical care than they would otherwise have
  • Although these programs provide essential and in some cases lifesaving medical care to millions of people
  • The program also dulls the price signals from the health care markets. Encouraging overuse of services
  • The major subsidies are provided in three ways:
    • o Medicare
    • o Medicaid
    • o Tax Expenditures

B. the concept of insurance[edit]

  • The transfer of risk from the insured (also called the beneficiary, recipient, member, or enrollee) to a financing entity (insurer, carrier, issuer, managed care organization, or self-insured benefit plan)
  • Typically, 1% of the population accounts for 20% of health care spending
  • 5% of the population accounts for half of all health spending
  • In other words, 95% of the population accounts for half of health care expenditures
  • Health insurance essentially spreads risk and costs from high-cost insured, who accounts for most of health care expenditures, to low cost insureds, who pay most of the premiums, through the medium of the insurer
  • Insurers deal with risk by pooling the risks of large numbers of insured
  • Traditionally, however, the insurer had to be prudent about the risk it assumed from these insured and ensure that it had the resources to cover the risk
  • When judging a particular applicant, the insurer had to first assess an applicant’s risk level, then determine if whether to take on that risk
  • A process called underwriting and finally set an appropriate premium
  • Premiums are the amount of money an insurance company charges to insure a particular patient for a certain period of time, such as a month or a year

C. congressional research services, insuring the uninsured: options and analysis[edit]

  • For insurance to operate, there has to be a way to predict the likelihood or probability that a loss will occur as a result of a specific outcome
  • Such predictions in insurance are based upon probability theory and the law of large numbers
  • According to probability theory:
    • o While some events appear to be a matter of chance, they actually occur with regularity over a large number of trials
  • In theory, all probabilities of loss can be insured
  • Insurance could cover any risk for a price
  • As the probability of loss increases, however, the premium will increase to the point at which it approaches the actual potential pay-out
  • To keep premiums competitive, there are in practice some risks that insurers will not accept
  • In general, insurable risks must meet the following criteria:
    • o There has to be uncertainty that the loss will occur, and that the loss must be beyond the control of the insured. Insurers will not sell hospital insurance to a person who is on his way to a hospital, nor fire insurance to someone holding a lit match
    • o The loss produced by the risk must be measurable. The insurer has to be able to determine that a loss has occurred and that it has a specific dollar value
    • o There must be a significant large number of similar insured units to make the losses predictable
    • o Generally, the loss must be significant, but there should be a low probability that a very high loss will occur

D. rate making[edit]

  • Ratemaking is the process of predicting future losses and future expenses and allocating those costs among the various classes of insured
  • The process of the rainmaking process us a “premium” or price of policy
  • The premium is made up of the expected claims against the insurer and the insurer’s “administrative expenses”
  • The term “administrative expense” is used to mean any expenses that the insurance company charges that is not for claims (including reserves for potential claims)
  • In the case of employer group coverage, a third part of the premium is set aside in a reverse held against unexpected claims
  • This reserve is often refundable to the employer if claims do not exceed expectations
  • I health insurance, the most frequently used approaches are experience rating and community rating
  • Under experience rating, the past experience of the group to be insured is used to determine the premium
  • The advantage of experience rating is that it adjusts the cost of insurance for a specific group in a manner more commensurate with the expected cost of that particular group than is possible through the exclusive use of manual rates
  • Insurers demand that each one “make every effort to retain groups with favorable experience”
  • Unless an insurer can provide coverage to such groups at a reasonable cost, it runs the risk of losing such policyholders to another insurer which more closely reflects the expected cost of their programs in its rates
  • Under community rating, premium rates are based on the allocation of total costs to all the individuals or groups to be insured, without regard to the past experience of any particular subgroup
  • Community or class set of rates to a large number of people, thus simplifying the process of determining premiums

E. adverse and favorable selection[edit]

  • Health insurance companies would have to adhere strictly to models of predictions if everyone purchased insurance and identical plans
  • Insurers use the term “adverse selection” to define as the “tendency of persons with poorer than average health expectations to apply for, or continue, insurance to a greater extent than do persons with average or better health expectations
  • Adjusting premiums for adverse selection results in further adverse selection
  • As the price of insurance goes up, healthier people are less likely to want to purchase insurance
  • Each upward rate adjustment will leave a smaller and sicker group of potential purchasers
  • If there were only single insurance company, it would serve a steadily shrinking market paying steadily increasing premiums
  • However, because there are several companies operating in the market, each company may strive to enroll in lower cost individuals or groups, leaving the higher cost cases for its competitors
  • “Favorable selection” occurs if the insurer successfully enrolls lower risk clients than its competitors
  • Some insurers may also attempt to limit adverse selection by careful selection of where they market and to whom they sell a policy
  • For example:
    • o A company offering a Medicare supplement (Medigap) plan might be more likely to advertise its plan in senior citizen recreation centers, where the patrons tend to be relatively young and healthy, than in nursing homes where the residents are probably older and have chronic health conditions
  • Moral Hazard is the tendency of insured persons to use more products and services than they would if they were not insured and had to pay the full price
  • Cost-sharing requirements are obligations for individuals to bear some of the costs of care at the time they receive the service
  • I.e, at the point of service, in the form of copays, coinsurance, or deductibles
  • Medically necessary insurers still pay for many low-value products and services that their insureds receive
  • Actuarial fairness, under which every individual pay for insurance based on his or her own risks
  • Employer-Based health coverage is where most Americans receive their insurance through their employer
    • o Employees can either contract with an insurance company for a group indemnity plan to cover their employees or self-insure their employees by taking on the financial risk themselves (also called self-funding)
    • o Typically, the employer pays a portion of that premium for each employee, and the employee pays the remainder
  • Self-insured employers typically hire third-party administrator, often an insurance company, to perform the administrative functions of providing health care benefits to their employees without taking the financial risks associated with indemnity insurance
  • Self-insured employers may also obtain a stop-loss reinsurance policy, which insures the employer against losses for a single employee or the aggregate group that exceeds a certain amount

F. the concept of managed care[edit]

  • To manage care plans, which contract with medical professionals to manage the cost, utilization, and quality of care
  • Managed care is a means of governing health care delivery
  • Managed care organizations, such as health maintenance organizations (HMOs) and other insurers do not just pay for health care goods and services as provided; they also attempt to control the price, utilization, and sometimes even quality of those goods and services by imposing controls, limits, and incentives on “participating” (or in network) health care providers, as well as managed care enrollees
  • Although managed care plans typically include an insurance function, government entities and academics have not always regarded managed care plans as insurers
  • Some state regulatory programs continue, even now, to treat traditional commercial insurance, Blue Cross and Blue Shield plans and some forms of managed care organizations differently
  • California regulates health insurance plans and managed care organizations through entirely separate administrative agencies, the California Department of Insurance and the Department of Managed Health Care

G. How not to think about “managed care”[edit]

  • “Managed care” was a category with a strong ideological edge, employed to imply competence, concern, and above all, control over a dangerously unfettered health insurance structure
  • Managed care was an alternative “to the unbridled fee-for-service non-system” that sent “blank checks to hospitals, doctors, dentists, etc.”
  • And led to “referrals of dubious necessity” and “unmanaged and uncoordinated care of poor dubious necessity”
  • Managed care was portrayed less as a means to control patient behavior than as a way to bring doctors and hospitals in line with perceived economic realities
  • Managed care promised not only cost-control but also coordination and cooperation
  • Not only better management but also better care
  • By imposing managerial authority on an anarchic “non-system,” managed care would simultaneously restrain costs and rationalize an allegedly archaic structure of medical care finance and delivery
  • Managed care represents a fusion of two functions that once were regarded as largely separate:
    • o The financing of medical care and the delivery of medical services. This interpretation, at least, provides a reasonably accurate description of the most familiar organizational entity that marched under the managed care banner until the late 1980s: the health maintenance organization (HMO)
  • In 1997, between eighty and ninety-eight percent of today’s private health insurers appear to fall into the broad category of managed care
  • In understanding the structure of health insurance, the crucial relationship between those who deliver medical care and those who pay for it
  • With risk shifting from insurers to employers, and with financial intermediaries playing more of an administrative role than in the past, the trilateral relationship is more complex
  • To characterize this trilateral relationship, we focus on three of its essential features:
    • o First, the degree of risk-sharing between providers and the primary bearer of risk (whether an insurer or a self-insured employer)
    • o Second, the degree to which administrative oversight constrains clinical decisions
    • o Third, the degree to which enrollees in a plan are required to receive their care from a specified roster of providers
  • Each dimension crucially affects the trilateral connections among provider, patient, and plan
  • Staff-model HMOs may seem like the quintessence of “managed care,” yet because they place financial constraints at the group level they do not necessarily concentrate as much risks on physicians as do other network-based health plans, nor do they necessarily entail as much clinical regulations at the micro-level
  • Micro regulation may go hand and hand with restrictions on patient choice of provider, but it also may not
  • Greater risk-sharing can co-exist with almost any set of arrangements
  • Getting the right care to the right patient at the right time is a managerial accomplishment and not a product of labels

H. Common definitions[edit]

  • Health Maintenance Organizations (HMOs)
    • o Usually limit their members to an exclusive network of providers, permitting their members to go to nonnetwork providers only in special circumstances
  • Point of Service Plans (POSs)
    • o Resembles HMO but allows their members to obtain services outside the network with additional cost-sharing (deductibles, coinsurance, or copayments), and are often subject to gatekeeper controls
  • Preferred Provider Organizations (PPOs)
    • o Organized systems of healthcare providers who agree to provide healthcare services on a discounted basis to subscribers
    • o Not limited to preferred, in-plan providers, but face financial disincentives, such as deductibles or larger copayment or coinsurance obligations
  • Provider Sponsored Organizations (PSOs)
    • o Integrated Delivery System (IDSs), physician-hospital organizations (PHOs), and provider-sponsored networks (PSNs), are networks organized by providers that contract directly with employers or other purchasers of health benefits to provide services on a capitated basis
  • Accountable Care Organizations (ACOs)
    • o Networks of doctors, hospitals, and other health care providers that agree to share medical and financial responsibility for the care of a patient population

I. cost, quality, access, and choice in the u.s health care system[edit]

  • The American health care system provides health care services for over 326 million people living in the United States
  • But it does not do so equally
  • For any individual, the cost, quality, level of access, and choice of providers available will depend on whether she has health insurance, the type of the plan she has, and where she lives
  • The U.S pays for more health care services than any other country both in absolute costs and per capita
  • Yet, it is the only high-income country lacking universal health care coverage
  • More than 10% of the population do not have insurance
  • U.S also lags behind other developed nations in terms of key quality indicators
  • The problems of high cost, mediocre quality, and limited access have given rise to substantial reform efforts over the last decade that offer an array of tools to achieve the “triple aim” – improving the experience of care, improving population health and reducing per capita cost

J. access[edit]

  • In the United States, most people access health care services through one or two avenues:
    • o Private health care coverage, obtained either through an employer (indemnity insurance of self-funded) or purchased on the individual market
    • o By qualifying for a public insurance plan like Medicare or Medicaid
  • Basic services are so expensive that few can afford them without third-party financing
  • Those who do not have coverage and do not qualify for public health care programs, must pay for services out of pocket, often at a significant price increase
  • Prior to ACA in 2010, uninsured reached a high at 49.9 million Americans uninsured
  • The ACA resulted in historic gains in access to health insurance by extending Medicaid eligibility and subsidizing the cost of individual health insurance for individuals earning less than 400% of the federal poverty level
  • By 2016, uninsured dropped by 27.3 million, just 8.6% of the population
  • Despite the improvement, access to health insurance still remains a major issue in the U.S health care system
  • Millions of people still lack insurance, geographic access to care, or sufficient finances to pay for deductibles, copays, and uncovered services
  • In 2016, 45% of uninsured adults stated that they could not afford coverage
  • Many do not have access through work or Medicaid since their state did not expand Medicaid
  • In 2016, 20% of uninsured adults went without necessary medical care because they could not afford it, compared to 3% of those with private insurance and 8% of those with public insurance

K. The uninsured[edit]

  • Most are adults under the age of 65
  • Living in families with incomes of more than $25,000 a year and at least one year-round worker
  • Largest ethnic group are the whites and non-Hispanics
  • Highest risks of not being insured includes:
    • o Adults between 26 and 43
    • o Racial and ethnic minorities (particularly Hispanics)
    • o Noncitizens
    • o Members of families with only part0time workers or no workers
    • o Workers employed in low-paying jobs
    • o Individuals in families with incomes below 200% of the federal poverty level
    • o Children being cared for by persons other than their own parents
  • Most are uninsured because they lack employment-related insurance
  • They do not qualify for Medicaid for financial, age, or condition-related reasons, or their state did not adopt Medicaid expansion
  • Only 62% of employees of employers who offer insurance receive it through their own employer (although many of those who do not are covered through a spouse’s employer)
  • Other simply cannot afford it
  • On average, employees must pay $5,714 per year for their employer’s family coverage, which constitutes approximately 31% of the premiums
  • The cost of coverage increased 4% for single coverage and 3% for family coverage in 2017
  • While this increase is historically quite moderate, general inflation was only 2.2% and wages increased only 2.3 percent
  • Lack of insurance, lack of health care, and poor health
  • Long-term uninsured are more likely than the insured to fail to get necessary medical care for serious condition (diabetes)
  • They are also less likely to get regular doctor check ups
  • The uninsured also suffer financially
  • 60% who have been uninsured at any time in the preceding year report medical debt problems
  • 2/3 of the uninsured report cost-related access problems, such as not filling a prescription or skipping recommended medical test, treatment, or follow-up visit
  • 59% of adults under 65 have used up all their savings
  • 17% have taken out a mortgage or loan to pay for medical debt
  • 34% have taken on credit card medical debt

L. The underinsured[edit]

  • Many Americans with insurance experience health-related financial problems
  • Many Americans are “underinsured,” meaning that despite having health insurance, they have high deductibles or out-of-pocket health care costs relative to their household income
  • 28% of working-age adults with insurance were underinsured in 2016, up from 23% in 2014
  • The increase was largely due to the fact that deductibles and health care cost are rising faster than wages

M. other barriers to access[edit]

  • Access to health care can also be compromised by more than just a lack of ability to pay and access to insurance
  • Americans ability to access the health care system also depends on race, ethnicity, socioeconomic status, age, sex, disability status, sexual orientation, gender identity, and residential location
  • Location plays a role in the access to health care

N. Cost[edit]

  • 27% of individuals identified affordability as the nation’s ‘most urgent health problems,” more than any other issues
  • In 2016, the mean family insurance premium ($18,142) was 30.7% of the median household income ($59,039)
  • Further in 2015, the average American household spent 2.5 times more on health care than it did in food
  • American citizens, businesses, and governmental entities all struggle to pay for health care, and yet bending the health care cost curve remains elusive

O. overview of health care costs[edit]

  • Americans – through our government, employers, and out of our own pockets – spend a great deal on health care
  • In 2016, the U.S spent more than $3.3 trillion on health care goods and services
  • The United States spends more on health care than on any other sector of the economy, including defense, transportation, education, or housing
  • The nation also spends more than any other economically developed country on health care, both as a percentage of GDP and per capita
  • In 2016, the United States spent 17.2% of its GDP on health care, $9,829 per capita
  • The United Kingdom spent 9.7% of its GDP, $4,192 per capita
  • Canada spent 10.6% of its GDP, $4,753 per capita on health care
  • In 2016, Americans paid $352.5 billion out of pocket to health care providers for health care services
  • 11% of the $3.3 trillion spent on health care the year
  • The federal and state governments paid most of the rest
  • The government, however, primarily finances health care for the elderly and disabled, veterans, and for lower-income pregnant women and children
  • Most working age Americans rely on private health insurance to cover the cost of their health care
  • Employers have begun to pass an ever-increasing share of the cost of health insurance on to employees
    • o Through increase of premiums
    • o Increased cost sharing
    • o Cutbacks in benefits
  • In 2017, the average cost of employment-related individual coverage was $6,690 and family coverage were $18,764
  • Both increased faster than employee wages and inflation
  • Between 2007 and 2017, the average premiums for a family policy increased by 55%
  • Employer contribution was paid to the employees in the form of reduced wages and limited pay increases
  • Employers also shift premium increases to employees through increased cost sharing in the form of deductibles, coinsurance, and copayments
  • Deductibles have more than quadrupled in the past decade from $303 on average in 2006 to $1,221 in 2016
  • In 2017, over half of all workers had “high-deductible plans,” which require a deductible payment of $1,000 or more before their health insurance benefits would cover any expenses
  • In 2017, the average copayment was $25 for primary care and $38 for specialty care, and the average coinsurance percentage was 19%
  • The average percentage of employers offering health insurance has declined from 69% in 2010 to 53% in 2017

P. Factors that explain high american health care costs[edit]

  • Overutilization
    • o The dominant narrative among policymakers and health services researchers has been that overuse of health care goods and services; i.e., waste, is the single largest driver of health care expenditures
  • Approximately 30% of all health care paid for by Medicare and private insurers in the United States is useless, unneeded, and a waste
  • This estimate now translates to more than $1 trillion each year
  • In 2014, Medicare spent an average of $13,347 per recipient in Miami, but just $6,971 in Anchorage

Q. prices[edit]

  • Unfortunately, in the effort to control utilization, policymakers significantly overlooked the other key element in determining health care expenditures: prices
  • Depends on the price you pay for each item
  • The average American sees a doctor 4 times a year, compared to 7.7 for the average Canadian or 10 for the average German
  • The average hospital stay for an American is 6.1 days, compared to 9 days for the average German and 7 days for the average Englishman

R. Market forces and structure[edit]

  • In the United States, the health care pricing problem results largely from the use and abuse of market power of dominant health care providers
  • The market for certain health care services – including health insurance, hospital care, and specialty physician services – has become highly concentrated in many geographic areas
  • Half of all hospital markets were highly concentrated, one-third were moderately concentrated, and no markets qualified as highly competitive

S. population demographics[edit]

  • Population growth contributes significantly to overall spending, but not per capital spending, where we also significantly outpace other countries
    • o People more than 80 years old, require a great deal of health care
    • o Aging problem has the largest impact on public programs
    • o 65 eligible for Medicare and Medicaid if financially needed

T. administrative cost[edit]

  • Americans also pay more than other countries for administrative costs, such as building and managing provider networks, processing and adjudicating claims, advertising, marketing, quality management programs, and member services
  • Administrative costs accounted for 25% of hospital spending in the U.S., which is more than double in the proportion spent in Canada and Scotland
  • This discrepancy in spending is compounded by the fact that Americans spend so much more on health care
  • Part of the discrepancy results from the percentage of Americans with private insurance
  • Private insurance simply cost more to administer than public systems because private insurance carry with them independent cost for marketing, underwriting, monitoring, and billing that do not exist in public system
  • Medicare spends less than 2 cents on the dollar on administrative costs
  • Private health insurances in some cases up to 25% of each premium dollar
  • Some of this spending goes to executives
  • CEOs of the 70 largest health care companies earn $9.8 billion in 7 years since the ACA passed
  • $20 million a year per CEO

U. The changing nature of diseases[edit]

  • Changes in the nature of disease from acute to chronic may also contribute to spending increases
  • According to the Centers for Disease Control and Prevention (CDC), about half of all Americans have one or more chronic health conditions, and one in four have two or more chronic conditions, including heart disease, stroke, cancer, type 2 diabetes, obesity, and arthritis
  • Increase from 21.8% in 2001 to 26% in 2014
  • 2014, 7 of the top 10 causes of death were chronic diseases
  • 86% of U.S health expenditures were spent on individuals with chronic conditions
  • Overall, while the changing nature of disease contributes to increased spending on health care, it is not a major driver of such increases

V. technology[edit]

  • Most health economists believe that the widespread and rapid adoption of health care technology also contributes to increasing health care costs
  • As new medical technologies are developed, physicians often adopt them if they provide and improvement un care, with little thought to how much that improvement is worth
  • The relationship between technology development and cost is complex and often conflicting
  • The impact of technology on cost often depends on a variety of factors, such as
    • o The availability of other interventions
    • o The patient population
    • o The particular type of technology
  • Variation in these factors can cause one new technology to dramatically increase in cost

W. Malpractice[edit]

  • Though malpractice continues to be a major source of irritation to medical professionals, it is not a major contributor to medical cost
  • Direct costs of malpractice premiums account for less than 1% of health care costs, though these costs tend to be borne disproportionately by physicians in particular specialties and geographic areas
  • Defensive medicine arguably is of greater concern, but the extent to which it contributes to health care costs has been reliably measured

X. quality[edit]

  • While the quality care in the U.S has increased in recent years, it can be significantly improved
  • A recent study found medical error to be the third leading cause of death in the United States, causing more than 250,000 deaths per year
  • The U.S health care system falls short not only in terms of cost and access when compared with other developed nations, but also on many measurements of quality and health outcomes overall
  • In a 2017 comparison with
    • o Australia
    • o The United Kingdom
    • o New Zealand
    • o Canada
    • o France
    • o Germany
    • o Netherlands
    • o Norway
    • o Sweden
    • o Switzerland
  • The U.S health care system ranked last on overall performances
  • Performing below average on all categories
  • Ranking 11th place in access, equity, and health care outcomes
  • Next to 10th in administrative efficiency
  • 5th overall in care process
  • In a nutshell, U.S healthcare system vastly underperforms its peers while spending substantially more

Y. choice[edit]

  • Many Americans have less choice of health care providers than their counterparts in other nations due to provider network limitations, geographic provider shortages, and the overall cost of care
  • Choice in healthcare occurs across three levels:
    • o Insurance plans
      • Most insurance markets are highly concentrated leaving little choices for insurers
      • Americans under the age of 65 receive health insurance through their employers, which limits the choice of insurance plans;
      • Limiting the choice of providers, by either refusing out-of-network providers or imposing significant cost sharing obligations for doing so
      • In many rural areas, as well as urban areas with highly concentrated markets, provider choice is limited further by a lack of competition and viable alternatives
      • Managed care organizations also frequently use primary care providers as gatekeepers to limit access to specialists and specialty services, further limiting patient choice
      • Insurance companies limit treatment choice through coverage denials for certain types of providers and treatments
    • o Providers
      • Canadians can receive care from any provider anywhere in Canada, and there is no limit on the number of providers a patient can see or the ability to switch providers
      • Canadians have less choice in insurance providers but more choices in health providers
    • o Treatment
  • Behavioral economics research also demonstrates that too many options can limit efficiency and diminish meaningful choice

Z. Health and reform tools[edit]

  • In an efficient health care system, it is impossible to contain costs without sacrificing access or quality
  • Likewise, quality could not improve without increasing costs or decreasing access
  • This phenomenon is called the “Iron Triangle of Healthcare”
  • The U.S healthcare system is not an efficient system
  • Expanding access can actually lower costs and reducing access can increase cost
  • Triple Aim
    • o Improving the health of populations (access)
    • o Improving the patient experience of care (quality)
    • o Reducing their per capita cost of healthcare
  • Approaches to health care reform can generally be divided between those that rely on regulation and those that rely on private market-based initiatives and incentives to govern behavior
  • All governmental programs for providing health insurance or health care to a portion of their population
  • The government bears more than 60% of health care expenditures (including tax expenditures and the cost of insurance for government employees), even though government programs cover around one-third of the population
  • However, the particular blend of reform tools a government takes to control costs, promote access, improve quality, and offer choice differs significantly depending on the country, and in some instances, state or province.

AA. Market-based approaches[edit]

  • Market-based approaches encourages competition in an effort to promote access, lower costs, and improve quality
  • These market-based approaches attempt to change the behavior of different actors in the health care market through supply-side and demand-side controls, or, alternatively, they seek to improve the functioning of the market for health insurance
    • o Supply-Side Control
      • Aims to constrain provider behavior in supplying health care services.
      • As the ones who order and perform health care services, physicians drive demands
      • Perhaps the most successful supply-side strategy to reduce costs and improve quality in recent years has been managed care, which combines the financing and delivery of care
    • o Managed Care Organizations
      • Typically uses a variety of supply-side tools to manage costs by restricting members to limited provider networks. Reviewing the utilization of services, or creating incentives for limiting the cost of care
      • Some MCOs also attempt to oversee the quality of care their members receive
      • MCO saved money by reducing utilization of health care services and negotiating significant reimbursement discounts with providers
    • o Provider Networks
      • Virtually, all MCOs either limit their members to particular network of providers or impose financial disincentives to discourage their members from “going out of network”
    • o Utilization Review
      • Refers to case-by-case evaluations that MCOs conduct to determine the necessity and appropriateness (and sometimes the quality) of medical care provided to MCO enrollees
      • UR aims to reduce the wide variations in the use of many medical services and minimize wasteful and unnecessary care
      • UR can take several forms
        • The oldest form is retrospective review, under which an insurer denies payment for care already provided, normally by deeming it medically unnecessary, experimental, or cosmetic
      • o Evidence-based clinical guidelines
        • Can provide significant guidance as to whether a particular treatment is appropriate
      • o Primary Care Physician Management
        • At the margin, UR blends into other care management strategies
        • Some form of UR rely on primary care physicians (PCPs) to act as case managers and gatekeepers for access to specialist and more intensive medical services
        • MCOs have successfully utilized primary care case management to provide preventative services, avoid unnecessary emergency room use, manage chronic conditions, and coordinate care across settings
        • Medicaid has successfully used primary care case management to control cost and improve patient care
      • o Capitation
        • Payment models aim to shift the financial incentives for providers from providing more care (as in fee-for-service reimbursement) to providing only necessary care
        • Models pay providers a lump sum for caring for MCO-enrolled patients over the course of a set period of time
      • o Integrated Care Delivery
        • Market-based approaches that promote provider collaboration and integration offer significant benefits in terms of controlling cost and quality of care
        • Ideally, integrated care is care that “is coordinated across entities, continuous over time, tailored to patients’ and families’ needs and preferences, and based on patients’ and caregivers’ sharing responsibilities
      • o Valued-Based Purchasing
        • The commitment to reducing excessive costs and waste lead many insurers and other payers to become interested in paying for health care goods and services based on their values
        • Refers to a wide range of payment models that link provider performance to reimbursement
      • o Demand-Side Control
        • On the other side of the equation, demand-side-controls aim to reduce the demand for health care services by changing the incentives for health care consumers
        • Seeks to curb costs at the point of purchase of health care products and services by increasing the amount the patient has to pay out of pocket
        • By giving patients some “skin in the game” these demand-side approaches sensitize patients to their health care costs
        • Which leads the patient to exert market pressure on providers through shopping or economizing on care
        • Without insurance, consumer-driven analysts argue, excessive health care costs would not be a problem because market forces would discipline prices and supply
        • Cost sharing tools both encourages consumers to avoid unnecessary care and to shop for the least expensive providers for necessary care
      • o Copays and Coinsurance
        • Are two of the most common forms of cost-sharing in health care
        • Plans with a copay require the patient to pay a set amount of money for a physician visit, hospitalization, or a prescription
        • Coinsurance is calculated as a percentage of the total fee that the patient must pay for a covered item or service
        • Cost sharing can be scaled to nudge patient toward lower-cost options
        • As a market-based approach to health care reform, patient cost-sharing attempts to address moral hazard by adding an incremental cost to seeking additional care, giving patients incentives, even if small, to limit themselves to only necessary services after their deductible has been met
        • Research shows that even modest cost sharing reduces patient’s utilization of health care
        • However, studies also indicate cost sharing has a disproportionate, negative impact on those chronic illnesses and the poor, highlighting questions of distributive justice
      • o Deductibles
        • Helps to control the demand for medical services by requiring patients to spend a certain amount of money out of pocket before their insurance begins to cover any medical expenses
      • o High Deductible Health Plans with a Savings Option
      • o HDHP/SOs aim to limit health care demand by making patients more responsible for their health care spending
      • o Pairs a high deductible health plan with a Health Savings Account (HSA) or a Health Reimbursement Arrangement (HRA)
      • o HRAs arose from an IRS determination that employer-funded contributions to health care savings vehicles are eligible for tax subsidies
    • Referencing Pricing
      • o Similar to deductible, reference pricing puts the consumer’s own money at stake, but reverses who pays for the first dollar for the services
      • o Instead of making the patient pay for the first few thousand dollars of care, health plans agree to pay the price for a given charged by a low-priced provider
      • o Consumers are free to select a different provide, but the individual would be responsible for the difference between that provider’s higher price and the reference price
    • Shared Decision-Making
      • o Offers an entirely different form of demand-side tool from those seeking to expose patients to financial responsibility for their health care choices
      • o Is a process in which the physician shares with the patient all relevant risks and benefit information on all treatment alternatives, and the patient shares with the physician all relevant personal information that might make one treatment more or less tolerable than others
      • o The patient and the physician then use this information to come to a joint treatment decision
    • Market Controls
      • o In addition to efforts to influence the behavior of purchasers or sellers of health care through supply-side and demand-side controls, other health reform initiatives aim to improve the functioning of the health care market itself
      • o The most prevalent of these initiatives is managed competition

BB. legislation and regulations[edit]

  • While the United States remains generally committed to using market forces to control costs and promote quality in the health care system, federal and state legislation and regulations can help address a variety of market failures that exist
    • o Access to Insurance
      • Guaranteed Issue
        • A guaranteed issue clause requires insurance companies to offer health insurance to all individuals regardless of their pre-existing conditions
      • o Community Rating
        • Guaranteed issue requirements only solve half the access problem for people with preexisting conditions.
        • In isolation, a guaranteed issue clause only requires an insurance company to offer coverage to an individual, but it does not limit how much the insurer can charge for coverage
        • As a result, prior to the ACA, when they did offer coverage, insurance
      • o Insurance Enrollment Mandates
        • The most direct way of increasing the number of people enrolling in insurance is to mandate enrollment
        • By requiring all people to maintain health insurance coverage. The healthiest and the sickest people in the community (and everyone in between) will enroll in insurance, evenly spreading the financial risk associated with being ill across all individuals
      • o Tax Incentives
        • Another method for encouraging individuals and employers to purchase insurance is to offer tax incentives for doing so
        • Offering tax credits in the individual market creates an opportunity to balance the playing field between individual and employer insurance
        • May encourage lower-income individuals who may struggle to afford the premiums
        • May prove effective with younger individuals who tend to make less and be healthier on average than older members
        • Policymakers can use tax incentives to encourage enrollments
      • o Public Insurance
        • A state or the federal government could also attempt to expand access to insurance by expanding existing public insurance offerings, such as Medicaid and Medicare, or by offering new public insurance programs
        • Government health care programs are limited to certain eligibility categories:
          • Age
          • Income
          • Disability
        • o Veterans’ Health Administration (VHA) and Medicare
          • Tax payers fund the VHA, which provides health care services to individuals who have served in the military, not dishonorably discharged, and who meet income or other eligibility requirements
        • o Price Regulations
          • In these programs, the government uses an administrative rate setting process, rather than negotiation to set providers and supplier rates
        • o Price Transparency
          • Americans currently know very little about the price of their health care services
          • Most providers have little to no knowledge of how much their patients will pay for various services
          • Prices for any given medical good or service can differ depending on the patient, plan, and provider involved, making it more difficult for patients to find out what their cost will be
          • Transparency Bill require notification to health insurers and the government before a significant price increase
        • o Price Caps
          • Price cap limits the extent of price variation by imposing a limit on high prices, but still permit providers to compete below the cap
          • Instead of referencing Medicare rates, regulators could also calculate price caps as a function of the average private prices for the services in the area
          • Price caps offer a solid middle ground between full rate setting and market-based reforms
          • Price caps can directly rein in extremely high provider prices, while still allowing for provider competition below the cap
          • These features make price caps particularly useful in a highly concentrated market with a dominant provider charging super-competitive prices
          • On the other hand, price caps do not eliminate the inefficiencies and administrative costs of price discriminations by providers
        • o Rate Setting
          • A more comprehensive approach of health care price regulation is administrative rate setting
          • Under an all-payer system, uniform prices are set either by a rate setting agency or through negotiation with representative body of payers
          • Rate regulations can constrain dominant providers’ pricing power, eliminate unwarranted price, discrimination, and variation, and reduce administrative cost associated with billing and negotiating with so many payers
        • o Market Control Legislations
          • State government have recently begun to pass legislation to prevent health care organizations from including provisions in their contracts with insurers that hinder competition and increase prices
          • Most Favored Nation Clauses
            • In contracts between health care providers and insurance guarantee insurers that the provider organization will not offer any other insurer a better rate for health care services
          • Must -have or dominant provider
            • Typically offer to include an MFN clause to induce dominant insurer to agree to a higher reimbursement rate
          • Nondisclosure agreements or gag clauses
            • Can Also distort health care markets by preventing insurers and providers from disclosing the negotiated prices for health care are goods and services to third parties
          • Cross boarder sale of health plans
            • Permitting the sale of health plans to citizens of other states promises individuals the ability to purchase lower priced health plans not offered in their states
            • The ACA permits cross-border sale of health plans through cooperatives and multistate plans so long as plans remain subject to state licensing and other state insurance laws
          • Association Health Plans (AHPs)
            • Are health plans that small businesses of the same professional, trade, or interest groups may offer to their members
            • AHPs offer individuals and small groups the opportunity to spread risk in a similar way to a large group
            • AHPs are a type of multiple employer welfare arrangement (MEWA) governed by ERISA
            • Under ERISA, states have regulatory authority over self-insured MEWAs and some regulatory authority over fully insured MEWAs to insure solvency and require state licensure and financial reporting

7. Health law -Chapter 10 the reuglation of insurance and managed care[edit]

  • The ACA is best known for its most significant accomplishment:
    • o Providing meaningful health insurance coverage to 20 million individuals
    • o Only 9% of Americans remained uninsured in 2016, the lowest percentage on record
  • ACA market place allowed young adults to stay on their parents’ insurance until the age of 26, and increased private coverage outside the Market place
  • More than 10 million people enrolled in ACA Marketplace by the beginning of 2017, with about 84% of enrollees receiving premium tax credits and 57% also receiving cost sharing reductions
  • Title II of the ACA accomplished the other half of the ACA’s increase in coverage through expansion of the Medicaid program to cover all persons earning up to 138% of the federal poverty level
  • Previously, Medicaid only covered certain categories of “deserving poor,” such as the disabled, children, or pregnant women, but it generally excluded childless, able-bodied adults
  • Health care costs have grown at historically low rates following the enactment of the ACA (due in part of the ACA, but largely from the economic recession)
  • Unsurprisingly, total health care spending has increased as coverage expanded, but the rate of health care spending has increased as coverage expanded, but the rate of health care cost growth decelerated in 2016 following two years of initial expansion
  • Not a single Republican member of Congress vote for its passage and have tried repeatedly to repeal the legislation
  • Opponents have filed dozens of lawsuits challenging the ACA and its implementation
  • The most controversial provision of the ACA has been the individual mandate, which was the subject of the first Supreme Court challenge and ultimately repealed in the Republican tax bill of 2017
  • Public opinion polls have found that the percentage of Americans who favored the ACA equaled or exceeded the percentage who opposed it
  • Although Marketplace premiums are initially lower than expected, they have been climbing steadily as Marketplace enrollees have turned out to be older and sicker than insurers had hoped
  • Uncertainty of the ACA’s future and efforts to undermine it have further destabilized the marketplace, causing many insurers to either raise premiums or exit the marketplace entirely, thereby reducing choices for marketplace consumers
  • The ACA has reduced individuals’ medical debt and personal bankruptcies, as well as uncompensated care at hospitals in states that expanded Medicaid
  • The ACA has been under constant legal attack and threat of repeal
  • The law’s opponents have won major legal and legislative victories that limit the Medicaid expansion and eliminate the individual mandate
  • The Trump administration has also taken steps to undo and reverse many rules and policies implementing the ACA
  • Republicans still have many numerous avenues by which to weaken the overarching function of the law and to exploit its vulnerability in the coming years

A. ACA Title I: Overview[edit]

  • The Act provides substantive protections and benefits for consumers
  • Unlike the pre-ACA era, insurers can no longer deny coverage or charge individuals more for health insurance based on a preexisting condition, coverage no longer has annual or lifetime limits
  • An insurer cannot rescind coverage after a person develop a health condition, and all plans must cover a specified set of essential health benefits
  • Individuals are no longer “uninsurable” because of their health status or their treatment cost

B. THREE-LEGGED stool[edit]

  • First leg:
    • o An insurer cannot deny coverage due to health status or preexisting condition
    • o Premiums do not vary due to health status
    • o Essential health benefits sold in the marketplace
  • Second leg:
    • o Individual mandate which requires nearly all persons to have health insurance coverage or pay a penalty
  • Third leg:
    • o Premium assistance tax credits or subsidies, that makes purchasing health insurance affordable for those who earn between 100%-400% of the federal poverty level (FPL)
    • o Cost-sharing reduction payments to reduce cost-sharing amounts (deductibles, copays, and co-insurance) for those earning between 100%-250% FPL
  • As with any three-legged stool, if you remove any of the legs, the stool falls down

C. Employer mandate and small business tax credits aca[edit]

  • Crowd out
    • o Occurs when employers stop offering insurance benefits in favor of allowing employees to seek coverage from Medicaid or the individual market
  • Employer shared responsibility provisions
    • o Requires employers to either offer minimum essential coverage that is affordable and provides minimum value to their employees and their families, or potentially make an employer shared responsibility payment to the IRS
    • o The employer shared responsibility provisions are often referred to as the employer mandate or the pay for paly provision
    • o The employer mandate only affects applicable large employers
    • o To qualify as an ALE in a particular year, an employer must have had an average of at least 50 full-time employees during the preceding calendar year
    • o All types of employers, including tax exempt and government employers can qualify as an ALE
    • o First, if the ALE does not offer minimum essential coverage to at least 95% of its full-time employees and their dependents (children up to age 26), and at least one of its full-time employees receives the premium tax credit for purchasing coverage through the health insurance market place, it will owe a shared responsibility payment
    • o Second, if ALE does offer minimum essential coverage to at least 95% of its full-time employees and their dependents, it may still owe a shared responsibility payment for each full-time employee who receives the premium tax credit for purchasing coverage through the Marketplace if:
      • The minimum essential coverage offered by the employer is not “affordable”
      • The minimum essential coverage does not provide “minimum value”
      • The employer did not offer the minimum essential coverage to that employee
    • o The ACA also provides a health care insurance tax credit for two consecutive years that covers up to 50% of premiums paid for by small business employers and 35% of premiums paid for small tax-exempt employers
    • o To be eligible, as small employer must have fewer than 25 full-time equivalent employees, pay an average annual wage per full-time employee that does not exceed $50,000 and pay at least 50% of the premiums for employees enrolled in qualified health care plan on the Small Business Health Options Program (SHOP) Marketplace or qualify for an exemption
    • o Tax exempt organizations can write of the credit against their payroll tax liability or receive a refund, while taxable businesses can write off the credit against taxes, they would otherwise owe

D. premium assistance tax credits: aca Section 1401; 26 U.S.C section 36b[edit]

  • ACA expanded access to health insurance for middle-income Americans by using means-tested tax credits to subsidize the purchase of private health insurance
  • While historically Republicans espoused this strategy for expanding access, all the Democratic House and Senate versions of the reform legislation included the strategy
  • 2014, American earning up to 400% of the poverty level became eligible for the tax credit
  • Tax credit was based on Insurance Premiums
  • The affordability index allows the percentage that individuals spend on health insurance to remain stable
  • If premium significantly increases, the government and individuals will continue to pay the same portion of the premium
  • Tax credit adjusts for age but not for any premium discount attribute to a wellness program or for a premium surcharge based on tobacco use
  • Most people with employer coverage do not qualify for the tax credit
  • Employees who are eligible for an employer-based plan are not eligible for premium credit unless the employer plan does not satisfy the minimum value requirement of 60% actuarial value or the employee’s share of the premium exceeds the affordability index percentage of their household income
  • Legal resident aliens with incomes below 100% of the poverty level who do not qualify for Medicaid are also eligible
  • US citizens with incomes below 100% of the poverty level in states that reject the Medicaid expansion remains ineligible for premium tax credits

E. cost sharing reduction payments aca sections 1402; 42 usc section 18071[edit]

  • The ACA provided not only the tax credits to reduce the cost of health insurance premiums, but also for direct payments to qualified health plans to reduce eligible individuals’ cost sharing (deductibles, coinsurance, and copayments)
  • Law limits cost-sharing for Marketplace plans
    • o Legislation imposes a maximum out-of-pocket expenditure limit
    • o Qualified health plans in the individual and small group market must offer coverage of a specific actuarial value (AV), the percentage of an average person’s health costs that a plan will pay for covered benefits
  • 4 Precious Medal Plans (Percentages of coverage)
    • o Bronze 60%
    • o Silver 70%
    • o Gold 80%
    • o Platinum 90%
  • Cost-sharing reduction (CSR) payments are made by the federal government directly to an insurer on behalf of an “eligible individual” to lower that individual’s cost sharing obligations
  • Silver covered eligible for CSR
  • Bronze, Gold, and Platinum are not

F. the health insurance marketplace aca section 1311; 42 usc sections 18031[edit]

  • The marketplace is a consumer-friendly market for health insurance, resembling a farmer’s market, stock market, or online travel service
  • Consumers can go and browse through the range of available insurance options and choose the best one for them
  • ACA drafters planned to manage competition between the participating insurance companies
  • 22 states have implemented either a state-based marketplace (12 states), a state-based marketplace that uses the federal platform (5 states), or a state-partnership Marketplace (6 states)
  • In state partnership marketplaces, the federal and state governments divide the responsibility for performing marketplace functions
  • On January 1, 2014, 28 states defaulted to the federally facilitated marketplace
  • To date, no states have established a regional marketplace
  • Marketplace for the nongroup market and the small group (SHOP) market or combining the two
  • CMS announced its intent to no longer operate the federal SHOP Marketplace on HealthCare.gov

G. qualified health plans aca section 1301; 42 usc section 18021[edit]