Law Commons^™

The Affordable Care Act, Remedy, And Litigation Reform, Brendan S. Maher

Faculty Scholarship

The Patient Protection and Affordable Care Act of 2010 (“ACA”) rewrote the law of private health insurance. How the ACA rewrote the law of civil remedies, however, is — to date — a question largely unexamined by scholars. Courts everywhere, including the United States Supreme Court, will soon confront this important issue.

This Article offers a foundational treatment of the ACA on remedy. It predicts a series of flashpoints over which litigation reform battles will be fought. It identifies several themes that will animate those conflicts and trigger others. It explains how judicial construction of the statute’s functional predecessor, the …

Reverse Payments, Perverse Incentives, Murat C. Mungan

Faculty Scholarship

Issuing and enforcing prescription drug patents requires courts and legislatures to strike a delicate balance. A patent gives drug manufacturers a legal, if temporary, monopoly on sales of a drug; this encourages manufacturers to engage in costly research and development of new medicines. But not all patents issued by the Patent Office are ultimately deemed valid – generic drug manufacturers can infringe the patent, and, when sued, attack its validity in court on a variety of grounds, including obviousness. In recent years, patent holders have begun to settle these suits (which they initiated) by paying the alleged infringer. Not surprisingly, …

Enough About The Constitution: How States Can Regulate Health Insurance Under The Aca, Brendan S. Maher, Radha A. Pathak

Faculty Scholarship

Last term, the United States Supreme Court upheld the constitutionality of the Affordable Care Act in a landmark decision. It is a forceful reminder that America’s oldest question — how power should be shared between federal and state sovereigns — retains powerful political salience. Critics have reflexively attacked the decision as an assault on states’ rights, while supporters have celebrated the result. Regrettably, insufficient attention has been paid to how, in actuality, health care regulatory authority has been and will be divided between federal and state governments. In this Article, we fill that gap. To do so, we apply “federalism-in-fact,” …

How Do The Elderly Fare In Medical Malpractice Litigation, Before And After Tort Reform? Evidence From Texas, Myungho Paik, Bernard S. Black, David A. Hyman, William M. Sage, Charles M. Silver

Faculty Scholarship

The elderly account for a disproportionate share of medical spending, but little is known about how they are treated by the medical malpractice system, or how tort reform affects elderly claimants. We compare paid medical malpractice claims brought by elderly plaintiffs in Texas during 1988–2009 to those brought by adult non-elderly plaintiffs. Controlling for healthcare utilization (based on inpatient days), elderly paid claims rose from about 20% to about 40% of the adult non-elderly rate by the early 2000s. Mean and median payouts per claim also converged, although the elderly were far less likely to receive large payouts. Tort reform …

Health Insurance And Federalism-In-Fact, Radha A. Pathak, Brendan S. Maher

Faculty Scholarship

The constitutional legitimacy of the Patient Protection and Affordable Care Act (“ACA”) received substantial attention. Less examined has been the legislation’s sub-constitutional effect on the regulatory power that states can and might exercise. Regarding a state's ability to promulgate "sickness rules," (those legal rules pertaining to the conditions or treatment an insurance policy covers) and "non-sickness" rules (those legal rules pertaining to insurance other than sickness rules), we scrutinize the ACA itself and contrast it with the other most significant statute governing private health insurance, the Employee Retirement Income Security Act of 1974 (“ERISA”). The authors would like to thank …

Some Thoughts On Health Care Exchanges: Choice, Defaults, And The Unconnected, Brendan S. Maher

Faculty Scholarship

One feature of the ACA that appealed to observers across the political spectrum was the creation of health insurance “exchanges.” Among other things, exchanges are intended to aid consumers in making simple and transparent choices regarding the purchase of health insurance. This Article considers how exchanges might benefit from the use of “default” options — both online and off. Given the significant number of Americans that have limited or no Internet access, offline defaults may be an attractive way to promote coverage of the “unconnected.”

The Benefits Of Opt-In Federalism, Brendan S. Maher

Faculty Scholarship

The Affordable Care Act (“ACA”) is a controversial and historic statute that mandates people make insurance bargains. Unacknowledged is an innovative mechanism ACA uses to select the law that governs those bargains: opt-in federalism.

Opt-in federalism – in which individuals choose between federal and state rules – is a promising theoretical means to make and choose law. This Article explains why, and concludes that the appeal of opt-in federalism is independent of ACA. Whatever the statute’s constitutional fate, future policymakers should consider opt-in federalist approaches to answer fundamental but exceedingly difficult questions of health and retirement law.

Brand New Law! The Need To Market Health Care Reform, William M. Sage

Faculty Scholarship

The most serious problem with the Patient Protection and Affordable Care Act (ACA) is not its contents but its packaging. Because it requires significant departures from business as usual in health insurance, health care delivery, and health behavior, the ACA is unlikely to succeed unless Americans feel a shared stake in its success. Unfortunately, the new law has been branded only by its opponents. Neither the Obama administration nor its congressional allies have effectively communicated the law’s key elements to the public. Most surprisingly, the groundbreaking program of near-universal health coverage the ACA creates does not even have a name. …

Erisa & Uncertainty, Brendan S. Maher, Peter K. Stris

Faculty Scholarship

In the United States, retirement income and health insurance are largely provided through private promises made incident to employment. These “benefit promises” are governed by a statute called ERISA, which many healthcare and pension scholars argue is the cause of fundamental problems with our nation’s health and retirement policy. Inevitably, however, they advance narrowly tailored proposals to amend the statute. This occurs because of the widely-held view that reform should leave undisturbed the underlying core of the statute. This Article develops a theory of ERISA designed to illustrate the unavoidable need for structural reform.

Should The Patient Conquer?, William M. Sage

Faculty Scholarship

In 1596, Robert Bainbridge carved “The patient shall conquer” into the wall of his cell in the Tower of London. It is highly unlikely that Bainbridge was an early advocate for recipients of medical care, imprisoned perhaps by a cruel sheriff denied his payroll taxes or by a domineering barber refused his fee. But its unintended meaning would immediately provoke sympathy from many health care reformers. As we confront the critical challenges of implementing national health-care reform, however, whether the patient should conquer is a legitimate topic for debate. Does the patient’s conquest risk the collapse of the health-care system …

Combating Antimicrobial Resistance: Regulatory Strategies And Institutional Capacity, William M. Sage, David A. Hyman

Faculty Scholarship

Amnesia is a common, important, but rarely noted side effect of antibiotics. Apart from medical historians, few recall the severe morbidity and mortality once associated with acute bacterial infection. However, decades of antibiotic overuse and misuse have compromised the long-term availability and efficacy of these life-saving therapies. If designed and implemented appropriately, regulation can reduce the risk of bacterial infection, reserve antibiotics for circumstances where they are necessary, and rationalize the use of the most powerful agents. Regulation of antibiotic resistance can be justified, and should be guided, by both efficiency and fairness. A range of regulatory options are available--some …

Organophosphates, Friend And Foe: The Promise Of Medical Monitoring For Farm Workers And Their Families, Adriane J. Busby, Gabriel Eckstein

Faculty Scholarship

Millions of farm workers nation-wide who load, mix and/or apply pesticides are exposed to incredible amounts of pesticides on a daily basis. Various inefficiencies and inconsistencies in the regulatory system - including insufficient illness reporting data systems, lack of regulatory compliance and enforcement, and inadequate data and information on the chronic effects of exposure and overexposure to various pesticides - increase the likelihood that these workers will continue to be exposed to dangerous amounts of pesticides.

This Article assesses the existing mechanisms designed to protect farm workers from occupational exposure to pesticides and identifies and analyzes some of the shortcomings …

Over Under Or Through: Physicians, Law, And Health Care Reform, William M. Sage

Faculty Scholarship

My purpose in this commentary is twofold. First, I want to offer a few thoughts on why the American medical profession sometimes has a hard time accepting law on its own terms. Second, I want to suggest that even “good law” from the perspective of the medical profession—should it overcome its habits of resistance—may still be bad health policy for the United States.

Creating A Paternalistic Market For Legal Rules Affecting The Benefit Promise, Brendan S. Maher

Faculty Scholarship

Notwithstanding the fact that ERISA was enacted to protect employee benefits, courts have narrowly construed the relief available when benefits are denied, out of concern that a stronger remedy would be too costly for the system to bear. Judges, I argue, are ill-equipped to make this policy judgment. Instead, a regulated, subsidized, paternalistic market should be created to permit the benefit players themselves to choose and price the strength of the remedy they desire. This is a superior means to reach the right level of remedial strength for the most players. To protect against undesirably weak remedial options being selected, …

Solidarity: Unfashionable, But Still American, William M. Sage

Faculty Scholarship

Illness, we are often told, is a private matter. Accordingly, none must interfere in the medical decisions that emerge from the confidential relationship be- tween physician and patient. Yet evidence of interdependence is ubiquitous in health care. One person’s malady can harm families, workplaces, clubs, churches, and sometimes entire communities. Similarly, a suffering pa- tient must rely on many individuals, associational groups, corporate entities, and government agencies for support and assistance. It is, therefore, unsurprising that various social units claim an interest and a voice in maintaining health and treating disease.

However, explicit solidarity has long been out of vogue …

Out Of The Box: The Future Of Retail Medical Clinics, William M. Sage

Faculty Scholarship

The 2000s was mostly a lost decade for reform of the health care delivery system. Among the few significant innovations was the retail medical clinic, where individuals could receive basic health care at posted prices without appointments, typically from nurse practitioners or physician assistants. Most retail clinics were associated with chain drugstores, supermarkets, or other "big box" retailers. This short article describes the implications of the retail clinic model for US health policy and health care reform. It is no longer available from the online journal in which it originally appeared.

Estimating The Effect Of Damages Caps In Medical Malpractice Cases: Evidence From Texas, David A. Hyman, Bernard Black, Charles Silver, William M. Sage

Faculty Scholarship

Using claim-level data, we estimate the effect of Texas's 2003 cap on non-economic damages on jury verdicts, post-verdict payouts, and settlements in medical malpractice cases closed during 1988–2004. For pro-plaintiff jury verdicts, the cap affects 47-percent of verdicts and reduces mean allowed non-economic damages, mean allowed verdict, and mean total payout by 73-percent, 38-percent, and 27-percent, respectively. In total, the non-econ cap reduces adjusted verdicts by $156M, but predicted payouts by only $60M. The impact on payouts is smaller because a substantial portion of the above-cap damage awards were not being paid to begin with. In cases settled without trial, …

Kairos And Safe Havens: The Timing And Calamity Of Unwanted Birth, Susan Ayres

Faculty Scholarship

It is impossible to know the number of infants killed or illegally abandoned at birth. No official reporting requirements exist, but conservative estimates claim that in the United States, 150-300 infants are killed within twenty-four hours of life and that over 100 infants are illegally abandoned. Beginning in 1999, in an effort to stem the problem of neonaticide and illegal abandonment, states began enacting laws to legalize abandonment. By 2008, all fifty states had enacted safe haven laws, which allow parents to anonymously abandon newborns by delivering them to designated providers, such as hospitals. This article provides a practical and …

Defense Costs And Insurer Reserves In Medical Malpractice And Other Personal Injury Cases: Evidence From Texas, 1988-2004, Bernard Black, David A. Hyman, Charles Silver, William M. Sage

Faculty Scholarship

We study defense costs for commercially insured personal injury tort claims in Texas over 1988–2004, and insurer reserves for those costs. We rely on detailed case-level data on defense legal fees and expenses, and Texas state bar data on lawyers’ hourly rates. We study medical malpractice (“med mal”) cases in detail, and other types of cases in less detail. Controlling for payouts, real defense costs in med mal cases rise by 4.6 percent per year, roughly doubling over this period. The rate of increase is similar for legal fees and for other expenses. Real hourly rates for personal injury defense …

Dances With Elephants: Administrative Resolution Of Medical Injury Claims By Medicare Beneficiaries, Eleanor D. Kinney, William M. Sage

Faculty Scholarship

In our judgment, Hoffmann and Rowthorn's research clearly demonstrates that the QIO-based complaint review process does not provide genuine relief to beneficiaries. People who complain typically want an explanation of their bad experience, compensation for harm they may have suffered, and assurance that future experiences will be better for themselves and for others. Medicare beneficiaries, however, receive minimal information about the resolution of their complaints and no substantive relief whatsoever.

As Hoffmann and Rowthorn point out, several reform proposals are now before Congress, including moving the beneficiary complaint function from QIOs to new "Medicare Provider Review Organizations." It is not …

Erisa, Agency Costs, And The Future Of Health Care In The United States, John Bronsteen, Brendan S. Maher, Peter K. Stris

Faculty Scholarship

Because so many Americans receive health insurance through their employers, the Employee Retirement Income Security Act of 1974 (ERISA) plays a dominant role in the delivery of healthcare in the United States. The ERISA system enables employers and insurers to save money by providing inadequate healthcare to employees, thereby creating incentives for these agents to act contrary to the interests of their principals. Such agency costs play a significant role in the current healthcare crisis and require attention when considering reform. We evaluate the two major healthcare reform movements by exploring the extent to which each reduces agency costs. We …

Relational Duties, Regulatory Duties, And The Widening Gap Between Individual Health Law And Collective Health Policy, William M. Sage

Faculty Scholarship

In response to a prominent editorial by Dr. Jeffrey M. Drazen, Professor Sage explains how a relational approach has impeded health law's ability to effectively govern the American health care system, arguing that health law has traditionally focused on the physician-patient encounter rather than on achieving collective objectives (which he calls regulatory duties). Professor Sage traces health law's relational emphasis to private and public law, professional ethics and bioethics, budgetary and general politics, and health care consumerism. He concludes that four areas of health policy-conflicts of interest in biomedical research, managed care and pay-for-performance, health care transparency and education, and …

Who Is To Shame? Narratives Of Neonaticide, Susan Ayres

Faculty Scholarship

In seventeenth-century England, single women who killed their newborns were believed to have acted to hide their shame. They were prosecuted under the 1624 Concealment Law and punished by death. This harsh response eventually evolved into a more humane and sympathetic one, as shown by the increasing number of acquittals in the late eighteenth century and by the sharp drop of prosecutions in the late nineteenth century. Then, in 1922, England passed the Infanticide Act, amended in 1938, which provided that a mother who killed her child would be prosecuted for manslaughter, not murder. Today, the great majority of women …

Might The Fact That 90% Of Americans Live Within 15 Miles Of A Wal-Mart Help Achieve Universal Health Care?, William M. Sage

Faculty Scholarship

The subject of this Essay is the retail medical clinic movement. Retail medical clinics-a few hundred exist at the time of this publication-are typically located in national or regional chains of discount stores, pharmacies, and supermarkets. 1 News articles describing this new phenomenon in American health care tend to examine its viability as a business. The symposium for which this Essay was prepared is devoted to the "Massachusetts Health Plan," that state's pioneering effort (in the current political cycle) to achieve near-universal health insurance for its residents. Accordingly, this Essay situates the retail medical clinic movement in overall "health policy," …

Some Principles Require Principals: Why Banning “Conflicts Of Interest” Won’T Solve Incentive Problems In Biomedical Research, William M. Sage

Faculty Scholarship

This Article seeks to bring greater discipline to the analysis of conflicts of interest in biomedical research, and by doing so to reveal trends and tensions in the research enterprise that require a more deliberate and longer term response. By comparing tensions in biomedical research to those affecting indisputably "relational" professionals such as lawyers, this Article concludes that "conflict of interest" is the wrong language to describe most of these situations, and leads to the wrong solutions. Conflict of interest analysis in law derives from an image of professional obligation running directly from expert agent to dependent principal. Because a …

Do Defendants Pay What Juries Award? Post-Verdict Haircuts In Texas Medical Malpractice Cases, 1988–2003, David A. Hyman, Bernard Black, Kathryn Zeiler, Charles Silver, William M. Sage

Faculty Scholarship

Legal scholars, legislators, policy advocates, and the news media frequently use jury verdicts to draw conclusions about the performance of the tort system. However, actual payouts can differ greatly from verdicts. We report evidence on post-verdict payouts from the most comprehensive longitudinal study of matched jury verdicts and payouts. Using data on all insured medical malpractice claims in Texas from 1988–2003 in which the plaintiff received at least $25,000 (in 1988 dollars) following a jury trial, we find that most jury awards received “haircuts.” Seventy-five percent of plaintiffs received a payout less than the adjusted verdict (jury verdict plus prejudgment …

Why Are Demonstrations Of Comprehensive Malpractice Reform So (At All) Controversial, William M. Sage

Faculty Scholarship

We are currently coming to the end of what I have described as the first malpractice crisis of the 21st century. Malpractice crises, which are defined by shrinking liability coverage and/or rising premiums, occur periodically. The insurance crisis that now seems to be ebbing was different in certain ways from its 20th century predecessors, but will almost certainly not be the last such period to arise. As interest in "solving" this crisis wanes for various reasons, we have to ask what we have learned from the last five years. In my opinion, this crisis has produced strong arguments for testing …

Bridging The Relational-Regulatory Gap: A Pragmatic Information Policy For Patient Safety And Medical Malpractice, William M. Sage, Joshua Graff Zivin, Nathaniel B. Chase

Faculty Scholarship

The Article distinguishes and explores three categories of information use: Helping patients understand and participate in their care; Improving patient safety, including analyzing medical errors and identifying unsafe health care providers and practices; and Assessing the performance of the medical liability system in its many dimensions including deterrence, compensation, justice, administrative efficiency, and stability.

For each category, the Article comments on existing laws or programs for information reporting or disclosure, points out major tensions or ambiguities, and suggests pragmatic improvements.

Pay For Performance: Will It Work In Theory, William M. Sage

Faculty Scholarship

The title of my lecture about pay for performance in health care (often abbreviated as "P4P") echoes a French management saying: "It's all very well in practice, but it will never work in theory." There is no doubt that medical pay for performance is popular. P4P initiatives are everywhere; a search of online news reveals nearly 2,500 stories about pay for performance in the last two years alone. Folk legend Arlo Guthrie would have called P4P a movement-a "Pay for Performance Medical Quality Movement." But before you join in, you might want to know what you are joining. So let's …

The Role Of Medicare In Medical Malpractice Reform, William M. Sage

Faculty Scholarship

The medical malpractice crisis we think we are in is not the medical malpractice crisis we actually are in. Today's malpractice crisis is not an epidemic of lawsuits, impressionable juries, or even excessive insurance premiums. The real medical malpractice crisis is that the law has formed little connection between the malpractice system and the health care system.