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Health Care Organization & Finance
Wayne State University Law School
Hammer, Peter J.

Healthcare Organizations and Finance Outline- Peter Hammer- Fall 2012
Chapter 4: Health Care Cost and Access: The Policy Context
The problems: 176-191
A. The Problem of Access
·         There are about 50 million uninsured individuals in this country.
I. Who Is Uninsured?
·         Males 18-24 (disproportionately young)
o   Some people have the ability to obtain insurance but choose not to. Their choice will affect the rest of the population.
o   There was a mandate in the universal healthcare act that required individuals to obtain insurance.
·         Racial Minorities
o   Hospitals and providers have the choice of where they want to geographically locate, and that is not necessarily going to be in low income neighborhoods.
·         Unskilled and non-union laborers
o   Unions fight to make sure that individuals have healthcare.
·         Low income families (low paying jobs)
o   Larger groups can pool their resources but those who are poor cannot do that as well.
·         Working Poor
o   Part of being uninsured is that you fall outside of the safety net.
o   You need to fall in the right category because if you are poor enough you can get it, and if you’re rich enough you can get it. But there are income qualifications to get into Medicaid, so if you are in between the two then you care outside of the safety net.
II. What Are the Implications of Being Uninsured?
·         If you get hurt or sick you could possibly go bankrupt. There are huge correlations between healthcare costs and bankruptcy. You have to pay out of pocket and that creates large financial stress.
i. Social and Economic Determinants of Health
·         This has to do with the choices that you make and the environmental impact on your health. This could include education, geographical location, nutrition, housing, environment (exposure to carcinogens, etc.).
B. The Problems of Health Care Costs
1. Recent Developments in Health Care Cost Inflation
·         We spend 1.7 trillion on healthcare. It is at 16.3% of the economy. Basically 1 out of every $5 spent on healthcare.
o   If you compare this to other countries they spend nearly half as much. Almost every other country spends less than we do when it comes to Gross National Product.
o   Just because we spend twice as much as England it does not mean we are better. In essence we are towards the middle when it comes to service that is being provided. We are not getting the correlation bang for the buck.
·         46% of all healthcare costs are paid by the federal government through Medicare and Medicaid.
3. Factors That Explain High American Health Care Costs
·         National Wealth
·         Population Aging
·         Waste, Fraud and Abuse
·         Market Structure
·         Administrative Costs
·         Malpractice
·         The Changing Nature of Disease
·         Treating “Hopeless Causes”
·         Higher Prices
·         Technology
Approaches to Expanding Access and Controlling Costs: 191-211
A. Options for Expanding Access to Care
1. Public Health Insurance
·         The US is very unusual in the fact that it relies on private finance of health care, and unique in that it fails to provide some form of public coverage for all those who cannot afford private insurance.
o   The US relies on Private Insurance to provide the majority of its healthcare to citizens.
2. Approaches to Encouraging the Purchase of Private Insurance
·         Tax Credits
o   To be of any value they would have to be fully refundable. The credits would have to be available to taxpayers whether or not tax liability was sufficient to cover the credits.
·         B. Mandates
o   Basically this is a mandate that requires those who can afford it to purchase a health care plan. Massachusetts enacted legislation for mandates in 2006.
o   You want to push people into insurance and by requiring a mandate, it is a way of doing that. It also is a way to game the system because people will wait to buy when they need it. The government wants to avoid this opportunistic approach. If there was no mandate the low health risk people will wait until they get sick, then opt in to get the benefits.
·          The individual mandate is not within the commerce power of the constitution.
o   The mandate is necessary for the affordable care act, but this is not an enumerated power under the necessary and proper cause.
o   The court says that it is ok to tax individuals for not opting in to health care. So although you can’t force people to buy healthcare, you can tax them for not getting it.
B. Cost Control
1. Cost Control Regulation
·         Medicare and Medicaid Programs in the US are not on a fixed budget like other countries. They are rather entitlement programs, under which providers are entitled to payment for all covered goods and services provided to eligible beneficiaries. Cost control efforts in Medicare and Medicaid have focused rather on limiting the prices paid for goods and services, or on the use of managed care, but have rarely tried to limit the volume of services received directly.
o   We have tried in the past to control supply and therefore control demand by limiting the number of supplies given to states and forcing them to submit a certificate of need in order to obtain the supplies. This type of procedure has a very limited effect on cost and therefore it was abandoned.
2. Managed Competition
·         A theory of health care delivery services that holds that the quality and efficiency of such services would improve if, in a market controlled by the federal government, independent groups had

short there is no obligation to provide care, but you are under EMTALA that enforces regulation.
·         There is no obligation to care unless there is a contract that is created.
A. Common Law Approaches
I. Ricks v. Budge
·         Dr. Budge was treating Ricks for an infected hand. Two days after his release Ricks returned for more help due to the infection and Budge denied because his account was overdue. Ricks had to go to another Dr. and eventually had his hand amputated, he sued Budge for malpractice.
·         May a physician unilaterally cease treating a patient due to lack of payment?
·         No. A physician, upon undertaking to treat a patient, must continue care for the patient until such time as care is no longer required.
o   A physician may discontinue care, but he must give the patient sufficient notice as to allow him to find alternative care. Here the Dr. didn’t
II. Childs v. Weis
·         Dr. Weis, upon being told that P was beginning labor, did not treat her but rather referred her to her regular physician.
·         Can a physician who does not undertake to treat a patient be liable for malpractice?
·         No. The relation of physician and patient is dependent upon contract. A physician is not liable for refusing to respond to the call of a person urgently in need of medical services.
III. Williams v. US
·         Williams, administratrix for the decedent, brought suit against the US for refusal to render emergency medical treatment to the decedent resulting in his death. Caucasian man refused treatment on an Indian reservation who then ends up dying the next day when he is forced to go to another hospital due to lack of oxygen and duress caused by the events of the day before.
·         Does either a physician, or a private hospital, have a duty to render medical services to every person requesting them?
·         No. None of the P’s theories allege a “duty” created by statute authorizing any mechanism for their enforcement, and the common law public utility doctrine has no application toward health care providers in private settings. The scope of the law is much narrower than the reach of moral command.