Law Commons^™

Changing The Tax Code To Create Consumer-Driven Health Insurance Competition, Regina Herzlinger, Barak D. Richman

Faculty Scholarship

Because current tax laws exclude employer-paid health insurance premiums from employees’ taxable wages and income, employer-sponsored insurance remains the primary source of health insurance for most employed Americans. Economists have long blamed the employer-based insurance tax exclusion for inflating health care costs, and, more recently, for constraining income growth and exacerbating income inequality.

We execute a simulation to test the effect of permitting employees to receive their employers’ premium contribution directly and then purchase health insurance themselves, using tax-free funds. Employees could deduct for income tax purposes the amount used for insurance and, if they spend less than the amount …

N.C. Medicaid Reform: A Bipartisan Path Forward, Barak D. Richman, Allison Rice

Faculty Scholarship

The North Carolina Medicaid program currently constitutes 32% of the state budget and provides insurance coverage to 18% of the state’s population. At the same time, 13% of North Carolinians remain uninsured, and even among the insured, significant health disparities persist across income, geography, education, and race.

The Duke University Bass Connections Medicaid Reform project gathered to consider how North Carolina could use its limited Medicaid dollars more effectively to reduce the incidence of poor health, improve access to healthcare, and reduce budgetary pressures on the state’s taxpayers.

This report is submitted to North Carolina’s policymakers and citizens. It assesses …

"Least Restrictive Means”: Burwell V. Hobby Lobby, Noah Marks

Faculty Scholarship

No abstract provided.

None Of The Laws But One, Neil S. Siegel

Faculty Scholarship

This Symposium contribution explores differences in how congressional Republicans responded to Medicare and how they responded to the Patient Protection and Affordable Care Act (ACA). Given the narrowness of the constitutional challenges to the ACA that congressional Republicans promoted and the many federal taxes, expenditures, and regulations that they support, this Article rejects the suggestion that today's Republicans in Congress generally possess a narrow view of the constitutional scope of federal power. The Article instead argues that congressional Republicans then and now-and the two parties in Congress today-fracture less over the constitutional expanse of congressional authority and more over the …

Regulating Systemic Risk In Insurance, Daniel Schwarcz, Steven L. Schwarcz

Faculty Scholarship

As exemplified by the dramatic failure of AIG, insurance companies and their affiliates played a central role in the 2008 global financial crisis. It is therefore not surprising that the Dodd-Frank Act—the United States’ primary legislative re-sponse to the crisis—contained an entire title dedicated to insurance regulation, which has traditionally been the responsibility of individual states. The most important insurance-focused reforms in Dodd-Frank empower the Federal Reserve Bank to impose an additional layer of regulatory scrutiny on top of state insurance regulation for a small number of “systemically important” nonbank financial companies, such as AIG. This Article argues, however, that …

Mental Health Care Consumption And Outcomes: Considering Preventative Strategies Across Race And Class, Barak D. Richman, Dan Grossman, Frank A. Sloan, Craig Chepke

Faculty Scholarship

In previous work (Richman 2007), we found that even under conditions of equal insurance coverage and access to mental healthcare providers, whites and high-income individuals consume more outpatient mental health services than nonwhites and low-income individuals. We follow-up that study to determine (1) whether nonwhite and low-income individuals obtain medical substitutes to mental healthcare, and (2) whether disparate consumption leads to disparate health outcomes. We find that nonwhites and low-income individuals are more likely than their white and high-income counterparts to obtain mental health care from general practitioners over mental healthcare providers, and nearly twice as likely not to follow …

Concentration In Health Care Markets: Chronic Problems And Better Solutions, Barak D. Richman

Faculty Scholarship

Health care providers with market power enjoy substantially more pricing freedom than monopolists in other markets, for a reason not generally recognized: US-style health insurance. Consequently, monopolies in health care cause undesirable redistribution of wealth and inefficient allocation of resources, both of which burden consumers at levels beyond those of other monopolists. The unusual costliness of monopoly power in health care markets demands far more policy attention than it has received. For starters, the health sector needs a more aggressive antitrust policy that effectively prevents the creation of new provider market power through mergers, alliances, or government immunity. An immediate …

Hidden Costs? Malpractice Allegations And Defensive Medicine Among Cardiac Surgeons, Barak D. Richman, Marco Huesch

Faculty Scholarship

This article evaluates the impact of private allegations of malpractice against cardiac surgeons on their patients’ outcomes and characteristics. While tort law may impact observable physician costs, malpractice allegations also impose hidden costs that could also affect physician behavior. We employ a large and multi-year panel dataset and patient-level analysis to ascertain whether malpractice allegations influence a surgeon’s practicing behavior. Using a generalized difference-in-difference model that controls for unobserved patient heterogeneity, clustering of patients within surgeon offices, contemporaneous expected risk, and other patient variables, we measure whether an allegation of malpractices affects a physician’s service intensity and use of healthcare …

“Early-Bird Special” Indeed!: Why The Tax Anti-Injunction Act Permits The Present Challenges To The Minimum Coverage Provision, Neil S. Siegel, Michael C. Dorf

Faculty Scholarship

In view of the billions of dollars and enormous effort that might otherwise be wasted, the public interest will be best served if the Supreme Court of the United States decides the present challenges to the Patient Protection and Affordable Care Act (ACA) during its October 2011 Term. Potentially standing in the way, however, is the federal Tax Anti-Injunction Act (TAIA), which bars any “suit for the purpose of restraining the assessment or collection of any tax.” The dispute to date has turned on the fraught and complex question of whether the ACA's exaction for being uninsured qualifies as a …

Overbilling And Informed Financial Consent — A Contractual Solution, Barak D. Richman, Mark A. Hall, Kevin A. Schulman

Faculty Scholarship

U.S. hospitals and physicians regularly charge uninsured patients and patients receiving care outside their health-plan networks far more what most health insurers pay and far more than their actual costs. Such practices have triggered over 100 lawsuits and prompted calls for pricing transparency in Congress and price regulation in several states. This Perspective argues that the theory of implied contracts, a foundation in most first-year courses in contract law, offers a useful legal and ethical mechanism for handling these troubling problems in health care billing.

Who Pays? Who Benefits? Unfairness In American Health Care, Clark C. Havighurst, Barak D. Richman

Faculty Scholarship

American-style health insurance greatly amplifies price-gouging opportunities for health care providers, who inflate prices both to enrich themselves and to subsidize and expand the nation’s health care enterprise. To the extent that lower- and middle-income Americans with private health coverage pay premiums that go to support and expand the system, they are subject to an unfair (regressive) “head tax” levied by unaccountable entities for ostensibly public but also private purposes. Lower-income premium payers also often pay for costly health coverage designed to suit the economic interests and values of professional and other elites rather than their own. They also appear …

Four Constitutional Limits That The Minimum Coverage Provision Respects, Neil S. Siegel

Faculty Scholarship

Opponents of the minimum coverage provision in the Affordable Care Act charge that if Congress can require most people to obtain health insurance or pay a certain amount of money, then Congress can impose whatever mandates it wishes—or, at least, whatever purchase mandates it wishes. This Essay refutes that claim by identifying four limits on the Commerce Clause that the minimum coverage provision honors. Congress may not use its commerce power: (1) to regulate noneconomic subject matter; (2) to impose a regulation that violates constitutional rights, including the right to bodily integrity; (3) to regulate at all, including by imposing …

A Cautious Path Forward On Accountable Care Organizations, Barak D. Richman, Kevin A. Schulman

Faculty Scholarship

The wave of new Accountable Care Organizations (ACOs), spurred by financial incentives in the Affordable Care Act, could become the latest chapter in the steady accumulation of market power by hospitals, health care systems, and physician groups. The main purpose behind forming many ACOs may not be to achieve cost savings but instead to strengthen negotiating power over purchasers in the private sector. This would be an unfortunate sequel to the waves of mergers in the 1990s when health care entities sought to counter market pressure from managed care organizations. The possibility that ACOs might further concentrate health care markets …

The Provider-Monopoly Problem In Health Care, Clark C. Havighurst, Barak D. Richman

Faculty Scholarship

Although federal judges have resisted giving due effect to standard antitrust principles in scrutinizing mergers of nonprofit hospitals, the presence of health insurance makes it especially important to oppose monopoly in health services markets. U.S.-style health insurance gives monopolist providers extraordinary pricing freedom, thus exacerbating monopoly’s usual redistributive effects. Significant allocative inefficiencies - albeit not the kind generally associated with monopoly - also result when the monopolist is a nonprofit hospital. Because it is probably impossible to undo past hospital mergers creating undue market power, we suggest some alternative remedies. One is to apply antitrust rules against "tying" arrangements so …

Most Claims Settle: Implications For Alternative Dispute Resolution From A Profile Of Medical-Malpractice Claims In Florida, Neil Vidmar, Mirya Holman, Paul Lee

Faculty Scholarship

No abstract provided.

On The Constitutionality Of Health Care Reform, Barak D. Richman

Faculty Scholarship

This commentary describes the legal challenges to the Patient Protection and Affordable Care Act.