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For Profit Enterprise in Health Care: Can it Contribute to Health Reform?

Published online by Cambridge University Press:  06 January 2021

Eleanor D. Kinney
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Since the demise of the last major health reform initiative in 1994, health coverage for the American people has deteriorated. Private insurance costs have risen, and coverage under private insurance became less comprehensive, with higher deductibles and copayments. Many new treatments for serious diseases and associated provider compensation have become more and more unaffordable, even for those with health insurance coverage. Recent reports document the challenges for cancer patients faced with the soaring cost of cancer treatment. Public programs, such as Medicare and Medicaid, have picked up some slack and have grown in numbers. But gaps remain. Approximately 16 percent of the U.S. population is uninsured. Annual U.S. spending for health care was $2 trillion in 2005, and is estimated to reach $4 trillion by 2015.

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American Journal of Law & Medicine , Volume 36 , Issue 2-3 , June 2010 , pp. 405 - 435
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Copyright © American Society of Law, Medicine and Ethics and Boston University 2010

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Footnotes

†

JD, MPH; Hall Render Professor of Law and Co-Director, Williams S. and Christine S. Center for Law and Health, Indiana University School of Law — Indianapolis. JD, 1973, BA, 1969; Duke University, MPH 1979, University of North Carolina School of Public Health.

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37 42 U.S.C. §§ 1395I (Part A) & 1395t (Part B) (2006).

38 Id. §§ 1395c–1395i.

39 Id. §§ 1395j–k.

40 Id. § 1395w-21.

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59 Id.

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63 Id.

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66 Id.

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108 Id.

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110 Id.

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126 Blue Cross Blue Shield Association, History of BCBSA: 2000s, http://www.bcbs.com/about/history/2000s.html.

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130 Joanne Silberner, Are Insurers’ Profits as Low as They Claim?, Nat’l Pub. Radio, Aug. 3, 2009, http://www.npr.org/templates/story/story.php?storyId=111494182.

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132 Brett Arends, Will a Public Option Hurt Insurance Company Profits?, Wall St. J., Aug. 5, 2009, available at http://online.wsj.com/article/SB124947013703607453.html.

133 Kaiser Family Found., Prescription Drug Trends (2008).

134 Top Companies: Most Profitable (2008), CNNMoney.com, May 4, 2009, http://money.cnn.com/magazines/fortune/fortune500/2009/performers/companies/profits/.

135 Congressional Budget Office, Research And Development In The Pharmaceutical Industry 4 (2006).

136 Jon Kamp, US Medical-Device Firms Shed Issues in 2010, But Gain Others, DOW JONES NEWSWIRES, Dec. 29, 2009.

137 Julie Appleby, Kaiser Family Found., Proposed Tax Rattles Orthopedic Device Industry, Kaiser Health News, Oct. 14, 2009, http://www.kaiserhealthnews.org/Stories/2009/October/14/Medical-device-tax.aspx (noting that medical equipment and suppliers as a whole showed five-year gross margins of 59%, compared with 45.8% for the S&P 500).

138 See F. M., Scherer, The Pharmaceutical Industry – Prices and Progress, 351 NEW ENG. J. MED. 927 (2004)Google Scholar.

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140 Dan Eggen & Ceci Connolly, Medical Device Makers Court Unlikely Allies: Pro Reform Democrats Defend Home State Firms, Wash. Post., Oct. 18, 2009, at A01, available at http://www.washingtonpost.com/wpdyn/ content/article/2009/10/17/AR2009101700718.html .

141 See supra notes 100-101 and accompanying text.

142 Atul Gawande, The Cost Conundrum: What a Texas Town can Teach us about Health Care, New Yorker, June 1, 2009, http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?currentPage=all

143 Id.

144 Ewe E. Reinhardt, The Pricing of U.S. Hospital Services: Chaos Behind A Veil of Secrecy, 25(1) Health Aff. 57 (2006).

145 Claudia Birkenshaw, Handbook for Hospital Billing 50-57 (2009).

146 Id. at 317-71.

147 Reinhardt, supra note 144.

148 American Hospital Association, Hospital Statistics 2005, at Table 3 (2005); Reinhardt, supra note 144, at 57.

149 42 U.S.C. § 1395f (2006) (Medicare); 42 U.S.C. § 1396 a(14) & 1396o (2006) (Medicaid).

150 Birkenshaw, supra note 145, at 402-03.

151 Gerald F. Anderson, From ‘Soak The Rich’ To ‘Soak The Poor': Recent Trends In Hospital Pricing, 26(3) Health Aff. 780 (2007); Margaret K. Kyle and David B. Ridley, Would Greater Transparency and Uniformity of Health Care Prices Benefit Poor Patients?, 26(5) Health Aff. 1384 (2007); Glenn A. Melnick & Katya Fonkych, Hospital Pricing And The Uninsured: Do The Uninsured Pay Higher Prices?, 27(2) Health Aff. w116 (2008).

152 Peter Davidson, The Basics: 10 ways to avoid outrageous hospital overcharges, Moneycentral.msn.com, http://moneycentral.msn.com/content/Insurance/Insureyourhealth/P74840.asp (last visited Apr. 15, 2010).

153 Sarah Rubinstein, Hospitals Put Patients’ Debt Up for Auction Collection Agencies Bid Online For Right to Recoup Funds; Worries About Tougher Tactics , Wall St. J., June 3, 2008, available at http://online.wsj.com/public/article/SB121244901525139563-KNO1CygwzzD0IGqMG8IfVp8_z80_20090603.html?mod=rss_free.

154 American Hospital Association, Hospital Billing and Collection Practices Statement of Principles and Guidelines, available at http://www.accessproject.org/adobe/AHA_hospital_billing_and_collection_practices.pdf.

155 A Pound of Flesh: Hospital Billing, Debt Collection, and Patients’ Rights , ISSUE BRIEF (Families, USA), Mar. 2007, available at http://www.familiesusa.org/assets/pdfs/medicaldebt.PDF.

156 See, e.g. , Hospitaldebtjustice.org, About the Hospital Debt Justice Project, http://www.hospitaldebtjustice.org/about.html (last visited Apr. 15, 2010); The Kaiser Family Found., Kaiser State Watch | Baltimore Sun Series Examines Debt Collection Practices of Maryland Hospitals, Kaisenetwork.org, Dec. 23, 2008, available at http://www.kaisernetwork.org/Daily_Reports/rep_index.cfm?DR_ID=56225.

157 Andrew McKinley, Hospital Billing Practices and the Uninsured: An Emerging Legislative Response, Health Care Fin. Mgmt. Ass’n, Nov. 2004, available at http://findarticles.com/p/articles/mi_m3257/is_11_58/ai_n6359492/.

158 Internal Revenue Service, IRS Exempt Organizations (TE/GE) Hospital Compliance Project: Final Report (2009), available at http://www.irs.gov/charities/charitable/article/0,,id=203109,00.html.

159 Id.

160 Id.

161 Provena Covenant Med. Ctr. v. Dep’t. of Revenue, 2010 WL 966858 (Ill. 2010), aff’g, 384 Ill.App.3d 734, 894 N.E.2d 452 (2009). See also Utah County v. Intermountain Health Care, Inc., 709 P.2d 265, 269 (Utah 1985).

162 Terminations of Individual Health Policies by Insurance Companies: Hearing Before the H. Comm. on Energy and Commerce, Subcomm. on Oversight and Investigations, 111th Cong. (2009) [hereinafter Hearing on Health Policies].

163 See, e.g., Karl Vick, When Your Insurer Says You're No Longer Covered: Firms Defend ‘Rescissions’ as Fraud Control, Wash. Post, Sept. 8, 2009, available at http://www.washingtonpost.com/wpdyn/content/article/2009/09/07/AR2009090702455.html Cancer Patient Tells of Rips in Health Insurance Safety Net , CNNPolitics.com, Jun. 16, 2009, http://edition.cnn.com/2009/POLITICS/06/16/health.care.hearing/index.html.

164 Hearing on Health Politics, supra note 6 (opening Statement, Rep. Bart Stupak, Chairman, Subcommittee on Oversight and Investigations).

165 Id.

166 Organization for Economic Co-Operation and Development, Pharmaceutical Pricing Policy Project, http://www.oecd.org/document/57/0,3343,en_2649_37407_35715449_1_1_1_1,00.html (last visited May 7, 2010).

167 Id.

168 Income, supra note 6, at 19-22.

169 U.S. CensusBureau, Health Insurance Coverage: 2008 - Highlights, http://www.census.gov/hhes/www/hlthins/hlthin08/hlth08asc.html (last visited Apr. 15, 2010).

170 Ctrs. for Medicare & Medicaid Servs., Office of the Actuary, National Health Expenditure Projections 2008-2018, at 3-5, available at www.cms.hhs.gov/nationalhealthexpenddata/downloads/proj2008.pdf.

171 Id.

172 Id.

173 I.R.C. § 162 (2006).

174 Joint Comm. on Taxation, Tax Expenditures for Health Care 2, 4 (2008), available at http://www.jct.gov/publications.html?func=startdown&id=1193.

175 Martin Gaynor & Deborah Haas-Wilson, Change, Consolidation, and Competition in Health Care Markets, 13(1) J. of Econ. Persp. 141 (1999);Thomas L. Greaney, Whither Antitrust? The Uncertain Future of Competition Law in Health Care, 21(2) Health Aff. 185 (2000).

176 Patient Protection and Affordable Care Act (PPACA), Pub. L. No. 111-48, 124 Stat. 119- 1025 (2010).

177 Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-52, 124 Stat. 1029-84 (2010).

178 PPACA §§ 1401-02. See Kaiser Family Foundation, Focus on Health Reform: Summary of New Health Reform Law 1, 2 (2010), available at http://www.kff.org/healthreform/upload/8061.pdf [Hereinafter Summary of New Health Reform Law].

179 PPACA § 1311. See Summary of New Health Reform Law, supra note 178, at 4-6.

180 PPACA §§ 1311-24, 1515. See Summary of New Health Reform Law, supra note 178, at 4.

181 PPACA §§ 1311-24, 1515. See Summary of New Health Reform Law, supra note 178, at 1.

182 PPACA §§ 1201-2708. See Summary of New Health Reform Law, supra note 178, at 6-7

183 PPACA §§ 2001-202. See Summary of New Health Reform Law, supra note 178, at 7.

184 PPACA §§ 3101-602. See Summary of New Health Reform Law, supra note 178, at 8.

185 PPACA §§ 3001-27. See Summary of New Health Reform Law, supra note 178, at 9-10.

186 Congressional Budget Office, Health Care: Cost Estimates for Health Care, http://www.cbo.gov/publications/collections/health.cfm (visited May 5, 2010).

187 Id.

188 David Whelan, Cranking Up the Volume: One Reason Medical Costs Are Getting Way Out of Control: GE Employs Too Many Good Salesmen, Forbes, Feb. 25, 2008, http://www.forbes.com/forbes/2008/0225/032.html.

189 See, e.g., Neil, Kirschner & Michael, S. Barr, Specialists/Subspecialists and the Patient- Centered Medical Home, 137 CHEST 200 (2010)Google Scholar; P. A. Nutting et al., Initial Lessons From the First National Demonstration Project on Practice Transformation to a Patient-Centered Medical Home, 7(3) Annals Fam. Med. 254 (2009).

190 See Anne C. Beal et al., The Commonwealth Fund, Closing the Divide: How Medical Homes Promote Equity in Health Care (2007), available at http://www.wafp.org/documents/ClosingtheDivide.pdf.

191 Jack Ginsberg, Am. Coll. of Physicians, Controlling Health Care Costs While Promoting The Best Possible Health Outcomes (2009), available at http://www.acponline.org/advocacy/where_we_stand/policy/controlling_healthcare_costs.pdf.

192 See Vasilios J. Kalogredis, Should You Consider Concierge Medicine?, PHYSICIAN's NEWS DIGEST, Feb. 2004, http://www.physiciansnews.com/business/204.kalogredis.html Is A “Concierge” Medical Practice for You?, The Entrepreneurial MD, Mar. 1, 2007, http://www.entrepreneurialmd.com/index/2007/3/1/is-a-concierge-medical-practice-for-you.html.

193 U.S. Government Accountability Office, Physician Services, GAO-05-920, Concierge Care: Characteristics and Considerations for Medicare (2008).

194 Daniel P. Kessler & Mark B. McClellan, Do Doctors Practice Defensive Medicine?, 111 Q. J. ECON. 353 (1997); Daniel P. Kessler & Mark B. McClellan, The Effects of Malpractice Pressure and Liability Reforms on Physicians’ Perception of Medical Care , 60 Law & Contemp. Probs. 81 (1997); Daniel P. Kessler & Mark B. McClellan, How liability law affects medical productivity, 21(6) J. Health Econ. 932 (2002).

195 Office of Tech. Assessment, 103rd Cong., Defensive Medicine and Medical Malpractice (1994); Patricia M. Danzon, Liability for Medical Malpractice, in 1B Handbook of Health Economics 1339, 1339-1404 (Anthony J. Culyer & Joseph P. Newhouse eds., 2000); Henry J. Aaron & Paul B. Ginsburg, Is Health Spending Excessive? If So, What Can We Do About It?, 28(5) Health Aff. 1260, 1270 (2009).

196 General Accountability Office, GAO 08-880, Nonprofit Hospitals: Variation in Standards and Guidance Limits Comparison of How Hospitals Meet Community Benefit Requirements (2008), available at http://www.gao.gov/new.items/d08880.pdf.

197 Robert Pear, Health Executive Defends Premiums, NY Times, Feb. 24, 2010, available at http://www.nytimes.com/2010/02/25/health/policy/25health.html.

198 Organization for Economic Co-Operation and Development, supra note 166.