California Legislature Tries to Stop "Patient Dumping"

Will the new law have the unintended consequence of accelerating the trend toward hospitals' closing down their emergency rooms?

|The Volokh Conspiracy |

Here's an interesting problem. The California Legislature is trying to do something about what it calls "patient dumping." By that it means the hospital practice of discharging non-paying homeless patients out into the world without any means to take care of themselves. As far as I know the bill hasn't yet been signed by the Governor.

The Business Journal described the bill this way:

Under SB 1152, hospitals are required to include a written homeless patient discharge planning policy and process, and discharge them to a safe and appropriate location. Hospitals are further required to develop a written plan for coordinating services and referrals for homeless patients with the county behavioral health agency, health care and social services agencies in the region, health care providers, and nonprofit social services providers to assist with ensuring the appropriate homeless patient discharge.

SB 1152 would also require the hospital to ensure that certain conditions are met as part of the discharge process of a homeless patient. These include offering the patient a meal, appropriate vaccinations and infectious disease screenings, weather-appropriate clothing, transportation to the discharge destination and providing necessary medication if the hospital has a retail pharmacy.

The bill is being sponsored by the California Pan-Ethnic Health Network (CPEHN) and Service Employees International Union (SEIU) California.

I suspect California is going to run into the same problems the federal government discovered with the Emergency Medical Treatment and Active Labor Act of 1986 (EMTALA), a well-meaning but not very well thought out statute requiring federally funded hospitals with emergency rooms to take in uninsured patients with medical emergencies and treat them until they become "stable." EMTALA provides no funding for this purpose. It is an unfunded mandate, so hospitals have every incentive to "dump" these patients at their earliest opportunity. The California proposal is, in part, a response to the incentives created by EMTALA.

But here's the catch with EMTALA: When the government imposed this unfunded mandate on a the healthcare industry, a work around was likely evolve. And it did. EMTALA applies only to hospitals with emergency rooms. The number of hospital emergency rooms that have been closed since EMTALA's passage is quite alarming (and I am not the first person to use the term "alarming" in this context).

This is from p. 16 of my Statement on Patient Dumping for the Commission on Civil Rights report on the subject from a few years ago:

From 1990 to 2009, the number of hospital emergency rooms outside rural areas declined from 2446 to 1779, with 1041 emergency rooms closing their doors (including some closing along with their hospitals) and 374 hospitals opening emergency rooms. Hospitals that provided a much higher than average level of medical care to uninsured, Medicaid, and other vulnerable patients were more likely to close their emergency rooms than those that did not. Similarly, hospitals with lower than average profit margins were more likely to close their emergency rooms. And for-profit status (as opposed to not-for-profit or government status) was also positively correlated with emergency room closure. All three of these factors are consistent with the conclusion that EMTALA has contributed substantially to the problem of emergency room closure, perhaps even being the predominant factor.

The rise of urgent care centers (which allows medical providers to sidestep EMTALA) parallels the decline of emergency rooms. The problem is that they are equipped for small emergencies, not big ones. They are thus a poor substitute for emergency rooms.

I don't pretend to have the answer to the country's healthcare issues. Patient dumping is a genune issue. But might the California law simply accelerate the decline of emergency rooms? And might it cause hospitals to resist admitting homeless patients in the first place?

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  1. All three of these factors are consistent with the conclusion that EMTALA has contributed substantially to the problem of emergency room closure, perhaps even being the predominant factor.

    “consistent with” means just about nothing.

    The rise of urgent care centers (which allows medical providers to sidestep EMTALA) parallels the decline of emergency rooms.

    Leaving EMTALA aside, urgent care centers partly replace emergency rooms, so it’s hardly surprising that emergency rooms close as these centers become more common. This simple mechanism is also “consistent with” emergency room closure.

    1. If you consider them a perfect replacement for ERs. Which they’re not

      1. Of course they are not a perfect replacement. I didn’t say they were, nor do they have to be to have an effect on ER usage.

        If they simply provide some of the services ER’s are asked to perform they will reduce the demand for emergency rooms.

  2. Cali didn’t score so well on Public Health Access (although overall they did well), so I can see why they’re trying to improve that: best-states/rankings/health-care.

    I see that the Tennessippi region ranked at the bottom, but we already knew that.

    1. I don’t know how to do the link thing (spaces added): https:// http://www.usnews.com/news/best -states/rankings/ health-care

        1. The one point I’ll add to the HTML Link Instructions is that many sites are forgiving about the quotes around the URL. The commenting system here at Reason is utterly unforgiving on that point. You must remember the quotes.

          1. You must remember the quotes.

            And you can’t have spaces between the quotes and the url being quoted. Best to do a preview and try clicking on it.

  3. New leading cause of death among the homeless:
    “Died of untreatable underlying conditions unrelated to the admission complaint”. Usually issued within 24 hours of admission.

    1. If you think doctors are going to be incentivized into killing their homeless patients, why hasn’t that happened yet? It already saves time and trouble.

      It’s almost as though people are not the utilitarian sociopaths your scenario requires..

  4. If only there was some law requiring doctors not to provide inadequate care…

    1. Maybe they could be required to take an oath of some sort.

  5. As an attorney with nearly 30 years’ experience in the world of health care, I think defining the problem as “patient dumping” misses the mark. Hospitals have a job–to take care of the sickest, who need the sometimes terribly complex and *always* expensive-to-provide services one can only get in a hospital. When a person no longer needs those services, they are preventing the services from being available to someone who *does* need the services. Hospitals (and the generally independent doctors who hold privileges there) are neither equipped nor funded to remedy underlying social conditions (homelessness, lack of preventative care, lack of transportation, etc.). Indeed, hugely funded governmental bodies and private charities have all poured money out like water in schemes to fix that problem, yet have overwhelmingly failed to make much of a dent. It is entirely unreasonable to think that an industry where the neediest hospitals are having increasing expenses and decreasing revenues can undertake the problem and still remain afloat amidst the social engineering demands being placed upon them.

    1. Part 2:

      When I read the statutory demands about care coordination, plan of care, etc., I was stunned at the legislative hubris. They might just as well pass a law that water should run uphill. Over the years I have spent hours and hours in numerous meetings as hospital administrators, physicians, social workers and more discuss *HOW* to accomplish care coordination for *ALL* patients being discharged. It is not a simple task that hospitals and doctors have just been ignoring in pursuit of filthy lucre–it’s very, VERY complicated (even when the patient population has resources), with a whole host of independent entities that have their own priorities and constraints.

      Now, does money get discussed? Of course! But it’s “No margin, no mission”. It is simple reality that the margin on the billing by the hospital and physicians at the major academic medical center at which I worked provided support for charity care (and lots of it!), Medicaid and Medicare (which often paid for services below the cost to provide the services), basic science research, clinical research, medical education. Over the years, they’ve had to add millions in administrative costs arising from numerous (and often ill-thought-out) federal and state mandates. Adding to the hospital’s and doctors’ “job” to solve thorny and as-yet irremediable social problems after the urgent medical problem has been stabilized is a recipe for unpleasant and counter-productive consequences

      1. “Hospitals (and the generally independent doctors who hold privileges there) are neither equipped nor funded to remedy underlying social conditions (homelessness, lack of preventative care, lack of transportation, etc.).”

        Correct but that’s not the issue here.

        Hospitals should be PART of the process to ensure comprehensive health care of the homeless.

        And you’re right, it’s not their job to “solve thorny and as-yet irremediable social problems” but they can and should be part of the process–especially since they are usually the first to become aware of the health problem.

        Also, I’d be interested to see which fed/state mandates you feel could be removed.

        The sanitation/disinfection standards?
        Back up power requirements?
        Ratio of physicians to population standards?
        Protected health information controls?

        My wife is a CRC (cancer clinical research coordinator), so yes, I understand the immense administrative burdens (and hear about it almost daily!).

        1. The business about clothing and transportation does seem to be something that can be provided by an agency of some sort, rather than the hospital.

          Vaccinations and infectious disease screenings look appropriate, and will have some benefit to the general population as well as to the patient. Medications look like part of the treatment.

      2. susancol delivers a theme worth thinking about not only in the medical context, but also with regard to public education?and all with regard to incentives and disincentives built into politics.

        On the education side, the most persuasive research to account for education outcome disparities mostly shows those disparities unconnected to things educational institutions do, or can do. Instead, the problems mostly relate to poverty and its attendant social disorganization.

        Politicians don’t want to hear that. It points toward a need for solutions that would strain public budgets, while proving politically unpopular except among beneficiaries?who will always be in the minority. So to deflect unwanted pressure, politicians noisily attack the schools for failing to fix what the politicians should have fixed themselves. That theme of attack becomes shared generally. We hear constantly about “failing schools.”

        The same dynamic will hurt the public and political standing of the medical community, in similar ways.

        The only real answer is to be found in politics. Educators and medical leaders could encourage a look in the right direction. They could openly resist politically motivated suicide missions, and tell politicians to take care of those problems themselves. Alas, the fact that politicians also allocate chunks of their budgets, makes education and medical policy leaders reluctant to speak out, or defend themselves against unreasonable politically motivated demands.

    2. But patient dumping makes me feel bad, and supporting this law is the quickest, easiest, and cheapest (for me) way to convince myself that I had a hand in solving the problem. If you only cared about these people as much as I do, you would agree. Also, you’re a racist.

      1. Attacking not one, but two strawmen. Lame.

  6. Liberals logic.

    Require hospitals to provide non-medical services without providing funding yet complain later about the high cost of health care.

    1. Wrong.

      Liberals logic.

      Require hospitals to COORDINATE non-medical services and also ADDRESS the high cost of health care.

      1. “a meal, … weather-appropriate clothing, transportation to the discharge destination”

        Seems like those are “non-medical services without providing funding” but liberals give their own meanings to words nowadays.

        1. Bingo.

        2. Yeah, it looks like California is leaning on another unfunded mandate to hospitals to solve a problem. That’s bad policy, no argument here.
          But I have lots of nits to pick otherwise!

          apedad ain’t wrong that Hospitals current policy of completely unplugging from subequent support systems is also bad.

          And the OP’s attempt to connect to the federal law’s incentives is pretty weak. I find her especially infuriating because unlike some of the other more…vehement right-wingers who occasionally post here, she creates the fallacious logical edifices that are very hard to take as just good faith partisanship (but I’ll keep trying!)

          Finally, blaming liberalism broadly for California’s particular idiosyncrasies is a bit like saying all liberal policies end up creating another Venezuela. Or taking a story as proof liberals hate Christians.
          You have a good hand; no need to overplay it.

          1. “blaming liberalism broadly for California’s particular idiosyncrasies ”

            We are talking about a proposed law.

            The California legislature has a liberal Dem supermajority. The Speaker of the California assembly and the California Democratic party now think Diane Feinstein is a reactionary.

            I don’t think it is overplaying a hand to blame stupid proposed laws in California on liberalism.

            1. And that very supermajority makes it do some weird stuff that’s hardly mainstream liberal philosophy.
              It’s a great argument against one-party states, not one against liberalism.

              Despite the general hunger for radicalism and change, it looks like Feinstein is gonna win reelection, though, so what does that say?

              1. That she is far more reasonable than her opponent.

          2. “Hospitals current policy of completely unplugging from subequent support systems is also bad.”

            I’m not sure that’s their current policy, but it’s a question of incentives. Voters should appreciate that if it’s important enough to demand that someone do it, but not important enough to fund, the costs will be borne by somebody. New requirements that impose costs will result in higher cost of care, lower quality of care, or both. One alternative would be: if the state says it’s important enough that X happen, the state should pay for it and spread the risk more equitably throughout the population.

            1. No argument here – that’s why I think policy highlighted here is a bad one, full of the usual politician short-term thinking.

              That’s an easy kill. Tying this policy to EMTALA is the part that’s more suspect.

              1. Even if it could be tied to EMTALA, the policy of dumping is less socially onerous than outright rejection, so the argument doesn’t go anywhere. That’s why OP is marrying it to hospital closures, with hospitals playing the children in “Won’t anyone think of the children?!”

                The end game is not a universe without EMTALA. It’s a universe where the consequences are funded. We inch closer to single payer.

                1. We are in complete accord. I probably don’t owe you a beer at this point.

                2. That is Gavin Buddyf**ker’s plan. CA taxes are going to skyrocket, alas.

      2. This is no answer. Coordination takes time, and must be performed by human beings. Human beings don’t work for free. This will increase administrative costs, which must be charged to somebody, or will cause some (marginal) hospitals to go out of business. That isn’t the end of the world, but let’s not pretend that hospitals have magic wands to solve this problem.

        How would a hospital “ADDRESS the high cost of health care”? Charge less? What did you have in mind?

        1. I meant Liberals address the high cost of health care (e.g. ACA).

          1. I don’t know how the ACA addresses the high cost of health care.

            1. It all depends on who’s costs you’re looking at.

              Now the public option would have actually reduced costs, but where we are now we’ve just shifted them in order to keep the middle man in business.

              1. If the who are the customers (i.e. consumers of medical services), I don’t know how keeping a middle man in business can save customers money. Customers pay for the middle man.

                1. Depends on what the middle man does, doesn’t it?

                  So-called middle men are, speaking generally, unfairly reviled.

                  1. I’m not trying to revile middle men. But insurers are a transaction cost. (Maybe a necessary one. Like lawyers.) And that increases costs.

              2. Because the public option works so well for BIA and the VA. Who doesn’t like being told they’re completely irrelevant to and powerless to affect the decisions that most closely impact their lives.

                1. “Who doesn’t like being told they’re completely irrelevant to and powerless to affect the decisions that most closely impact their lives.”

                  That wouldn’t happen with a public option anymore than it does for veterans and the VA. I know veterans who don’t use the VA. I know veterans who do.

              3. Now the public option would have actually reduced costs

                *giggle*

                1. What, you don’t believe in markets, Careless?

  7. Under SB 1152, hospitals are required to include a written homeless patient discharge planning policy and process, and discharge them to a safe and appropriate location.

    “Homes of California Legislators” seems to fit both safe and appropriate.

  8. The California proposal is, in part, a response to the incentives created by EMTALA.

    Government: If you think the problems we create are bad wait until you see our solutions.

    1. I have that T-shirt.

  9. “The California proposal is, in part, a response to the incentives created by EMTALA.”

    Well, yea. You can’t have patient dumping if the homeless person just dies outside the hospital. But I take it that wasn’t your point?

  10. I can hardly wait until “homeless advocates” and relatives of homeless people start suing hospitals for their failure to coordinate.

  11. I have often disagreed with Professor Heriot, but I do tend to agree that imposing expensive mandates on private parties without providing any funding or support mechanism is a recipe for “unanticipated” consequences.

    I also agree these consequences have happened so often in the past that people ought to wise up and start anticipating them.

    If the California legislature wants more services to be provided to homeless people, it should either provide these services itself or provide funding to support private parties doing so. There has to be a means commensurate with the ends. Otherwise things just don’t work. And when things just don’t work, everyone is usually worse off.

  12. I have often disagreed with Professor Heriot, but I do tend to agree that imposing expensive mandates on private parties without providing any funding or support mechanism is a recipe for “unanticipated” consequences.

    I also agree these consequences have happened so often in the past that people ought to wise up and start anticipating them.

    If the California legislature wants more services to be provided to homeless people, it should either provide these services itself or provide funding to support private parties doing so. There has to be a means commensurate with the ends. Otherwise things just don’t work. And when things just don’t work, everyone is usually worse off.

    1. “. . .imposing expensive mandates on private parties without providing any funding or support mechanism. . . ”

      Happens all the time, everywhere.

      Airlines/Train companies
      Chemical plants (and anything with hazmat)
      Restuarants
      Coal mines
      Arms manufacturers/dealers
      Nuke plants
      Defense contractors

      1. There are situations where it makes sense. An argument for imposing the cost on airlines (or more specifically their passengers) is that the risk of airlines should be borne by people who use airlines. If we think hospitals are intended to serve a social purpose beyond their business relationship with clients, it seems like maybe we should pay them to do so, rather than demanding that their other customers do so. Healthy people (i.e. non-consumers of medical services) have as much social interest in homeless being kept alive as do sick people (i.e. consumers of medical services), so why would we shift the costs entirely to the latter class? (There are counter-arguments. One would be that shifting the cost generally to sick people will encourage healthy living. The counter to that is costs are so diffuse they can’t possibly modify any individual’s behavior. It’s complicated.)

        Of the industries you’ve listed, I can be persuaded that the costs should be borne by the industry’s customers for: airlines, trains, and restaurants. I feel differently about coal mines, arms manufacturers/dealers, and nuclear plants. Defense contractors are a special case, since the “customer” is the US government, so the cost is already spread to the tax base.

        1. I feel differently about coal mines, arms manufacturers/dealers, and nuclear plants.

          What mandates on coal mines and nuclear plants should not be borne by owners and thus, inevitably, by customers? If they are related to public safety then surely the cost of the relevant risks should not be borne by the public or the government.

          If they are related to employee safety then things get tricky, because the costs may be partly borne by workers, but I doubt these are really competitive labor markets.

          1. A restaurant that poisons people will hurt only its customers. A nuclear power plant that melts down will hurt people who never engaged with nuclear power at all. Further, the costs for a nuclear melt down are above and beyond the liability tolerance of individual businesses. The NRC’s costs are (appropriately) borne by all tax payers, rather than just people who purchase nuclear energy.

            1. A nuclear power plant that melts down will hurt people who never engaged with nuclear power at all. Further, the costs for a nuclear melt down are above and beyond the liability tolerance of individual businesses. The NRC’s costs are (appropriately) borne by all tax payers, rather than just people who purchase nuclear energy.

              Not appropriate at all. A nuclear plant generates profits for its owners, or at least they hope so, and presumably provides benefits to its customers. The associated risks are costs of operating the plant, no less than worker salaries and everything else.

              There is no reason the plant owners should be allowed to externalize that cost, any more than they should be have taxpayers pay their employees.

              ..the costs for a nuclear melt down are above and beyond the liability tolerance of individual businesses.

              The possible cost of a car accident are above and beyond the liability tolerance of many drivers. That’s why we have insurance.

              For the nuclear plant the possible loss may be so big that private insurers won’t cover it, so it has to be covered by government, but that doesn’t mean the plant owners shouldn’t pay an appropriate premium to the Treasury. If that premium is so big it puts them out of business then maybe nuclear power is an uneconomic proposition.

              Expected (in a probabilistic sense) damage to third parties is part of the (total) cost of running a business. It is not a good idea to let companies externalize that.

              1. “The possible cost of a car accident are above and beyond the liability tolerance of many drivers. That’s why we have insurance.”

                Nuclear power plants are insured, too. I would submit to you that society has a broader interest in regulating nuclear power plants (and enforcing those regulations before-hand as opposed to just enforcing insurance agreements paying for damages after-the-fact). But reasonable minds can disagree, and if you think communities should put themselves entirely at the mercy of nuclear power plant owners, I just disagree.

                1. I would submit to you that society has a broader interest in regulating nuclear power plants (and enforcing those regulations before-hand as opposed to just enforcing insurance agreements paying for damages after-the-fact). But reasonable minds can disagree, and if you think communities should put themselves entirely at the mercy of nuclear power plant owners, I just disagree..

                  What makes you think that is my opinion? The costs I was referring to are the cost of the damage caused by a nuclear accident, not the cost of staffing and operating a regulatory agency. And those former costs are what the owner should bear, because they are legitimate social costs of operating the plant.

                  Further, those costs are what I took you to be referring when you wrote that, “the costs for a nuclear melt down are above and beyond the liability tolerance of individual businesses.”

                  Above, you wrote that, “An argument for imposing the cost on airlines (or more specifically their passengers) is that the risk of airlines should be borne by people who use airlines,”

                  and then,

                  “I can be persuaded that the costs should be borne by the industry’s customers for: airlines, trains, and restaurants. I feel differently about coal mines, arms manufacturers/dealers, and nuclear plants.”

                  Again, I understood the costs in question to be those related to damage various types of accidents can cause. These are the costs that should not be externalized.

              2. bernard,

                Both you and NT are both incorrect on several counts regarding design of nuclear plants and their regulation.
                1) Like every other regulatory agency, the NRC must be paid for by taxes revenues. It may not be funded or co-funded by the industries or other government activities that it regulates.
                Plant owners do pay for the licensing process which in itself can take ~ 5 years and cost between 20 to 30 million dollars.

                2) Mitigating the risks of nuclear power are first dealt with in the design of the plants. Risk control methods have evolved significantly over the past 30 years & are still evolving. The risks involve far more than catastrophic failures such as meltdowns ? the assumption that meltdowns are the primary risk are highly oversimplified.
                Large risks are associated with the release of any fission products; smaller but significant risks are associated with the released of any irradiated materials. This nuclear risk management is a highly developed profession.

                Costs are borne by the plant owners who may pass these along to consumers.
                Cost cannot be passed on to consumers until plant operations begin. Cost recovery schedules for are regulated by public utility commissions in the relevant state.
                Operators buy insurance to cover liabilities. These may be passed on to consumers
                You claim ” It is not a good idea to let companies externalize that [costs of operations.}
                But that is how every business works (or at least the ones that survive)

                1. Don Nico,

                  Thanks for the information.

                  As I note above, I was not referring to the costs of operating the NRC, but to the costs imposed on society by accidents. These are the costs that the plant owners should bear, and insure against, as they seem to, based on your comment.

                  The cost of the insurance is based on the expected cost of accidents – that is, the sum of all costs of possible accidents times their individual probabilities, and that is a normal cost of doing business. It should not be externalized.

                  You say, referring to me,

                  You claim ” It is not a good idea to let companies externalize that [costs of operations.}
                  But that is how every business works (or at least the ones that survive)

                  I disagree with you here. Maybe I misunderstood your point. I know that many businesses try to externalize costs, and complain about “burdensome job-killing regulation” when someone tries to stop them, but I don’t think that is necessary to be successful, and I base that opinion on a long career in business.

                  1. bernard11, I think we’re talking past each other. Back to the original discussion, I didn’t interpret apedad’s comment as saying that the “expensive mandates” against restaurants were their own ordinary, say, tort liability. In context, EMTALA, and the proposed California statute, are not merely regulations to enforce tort obligations on hospitals. Rather, they require the hospitals to do something above and beyond (1) anything the hospitals would have voluntarily agreed to do in the first place; and (2) providing services the hospitals’ customers want. If we are going to make hospitals serve homeless people, don’t you think the public should pay for it (through taxes) rather than imposing it exclusively on the hospital’s other patients?

                  2. Bernard,

                    Just to be specific, licensing costs ( and the attending cost of license extensions) can and are amortized over a period allowed by the tax authorities and the PUCs. As legitimate operating costs they can be passed on to customers subject to constraints imposed by the relevant PUC.

                    To NToJ’s point, I don’t know of any costs imposed by NRC regulation that cannot be passed on to the customer. But the ab initio costs cannot be passed on as accrued but must wait until the updated service is provided to the customer.

                    1. NTOJ,

                      I think we’re talking past each other

                      Me too. I took the comment as referring not so much exactly to tort liability, but to steps the restaurant, or nuclear plant, were required to take to reduce the chance of the tort. I think those costs should be borne by the company, even if they are greater than the expected damage. This is because first, bankruptcy limits liability, and second, because damage lawsuits are a wildly inefficient, expensive, and sometimes useless way for those damaged to get compensated. Call it tort prevention.

                      Now, I view these kinds of regulations as not at all similar to the proposed CA rules for hospitals, which have not much to do with potential damage to third parties. Rather the CA proposal makes hospitals provide certain services to their homeless patients, so I’m not sure how we got from one to the other.

                      Regardless, you ask,

                      If we are going to make hospitals serve homeless people, don’t you think the public should pay for it (through taxes) rather than imposing it exclusively on the hospital’s other patients?

                      To answer your question directly: Yes, I do think that.

  13. Not a lot of libertarianism going on in these comments.

    1. I recommend finding a libertarian site if you want to find libertarian comments.

  14. Those who are incapable of caring for themselves are in one category. But what about those who could have afforded inexpensive and renewable major medical health care insurance when they were young and healthy but declined to do so, preferring to spend the premium money on other things and leaving themselves without coverage when an emergency hits? On the one hand it’s difficult to watch a person having to go without health care. On the other hand, if there is no penalty for failing to buy insurance, who will do so? If I don’t buy home insurance is it the duty of the government to replace my house after a fire?

    1. If I don’t buy home insurance is it the duty of the government to replace my house after a fire?
      Well, we’ve decided you do get shelter after suffering that regardless of your insurance decisions, so…

      In the system we have, clunky as it is, the number of covered people is going up, even without a penalty. Because moral hazard is a problem, but as any health care policy expert will tell you, it is not a motivating one for most folk’s health care decisions.

      Focusing on someone is getting something they don’t deserve versus all the people getting something they do is pretty myopic.

      1. Because moral hazard is a problem, but as any health care policy expert will tell you, it is not a motivating one for most folk’s health care decisions.

        Moral hazard occurs when someone increases their exposure to risk when insured, especially when a person takes more risks because someone else bears the cost of those risks.

        I am not talking about people with health insurance increasing their exposure to risk. I am talking about people failing to purchase health insurance on the bet that they won’t need it, in order to spend the insurance premiums on other things. Then, after they acquire a medical condition they want to buy insurance. They made the gamble and they lost.

        Let’s leave aside the people who literally can’t manage their own affairs, and the people who do not have the ability to get out of poverty. For the rest, what’s wrong with simply educating them when they are young about the benefits of a major medical health insurance plan that can’t be cancelled and convincing them that the government will not be there to bail them out if they decide to take the risk? Isn’t it better for people to be buying their own insurance than for the government, with all their inefficiency, to be heavily involved?

        1. Isn’t it better for people to be buying their own insurance than for the government, with all their inefficiency, to be heavily involved?

          I speculate that the government?if it would engage?would prove more efficient than any other party, or any other mechanism, at lowering the price of pharmaceuticals, without unduly burdening their availability. I don’t say that because government is so highly efficient, but because the private alternatives which exist demonstrate daily that they don’t like the job, and won’t do it. Indeed, the private sector alternatives scheme continuously to drive prices beyond anything the private market can bear, by recruiting government money to make up the difference.

          1. “the government?if it would engage?would prove more efficient than any other party at lowering the price of pharmaceuticals” Large volume purchase does just that. Of course there are costs associated with any middle man.

          2. Indeed, the private sector alternatives scheme continuously to drive prices beyond anything the private market can bear, by recruiting government money to make up the difference.

            The solution to this is for the government not to make up the difference. No rational seller will charge more than people will pay, and if people have to pay out of their own pockets for everything less than major medical, this drives down the price. Thinking that the government is the best way to control prices is what got Venezuela into trouble.

      2. Focusing on someone is getting something they don’t deserve versus all the people getting something they do is pretty myopic.

        How do people who refuse to purchase coverage they can afford deserve that coverage after they get sick?

        1. Because lots of them didn’t refuse, they couldn’t, or didn’t have an employer, or all sorts of reasons.

          Your virtuous/invirtuous dichotomy is more rationalization than realistic.

          1. Because lots of them didn’t refuse

            The question I asked was about those who did refuse.

    2. Since we aren’t going to lose EMTALA, this seems like another very strong argument for single payer, even if it does result in worse services for more people.

      1. Since we aren’t going to lose EMTALA, this seems like another very strong argument for single payer.

        I don’t follow. What’s the argument for single payer? Why isn’t it an argument for requiring people to purchase health insurance when they are young and healthy because otherwise they will have no coverage when they suddenly have a pre-existing condition?

        1. Because broccoli, or something.

          1. Because broccoli, or something.

            I guess if your argument doesn’t make any sense it can’t be refuted, but how can that be satisfying?

            Are you saying that there is no way to convince people to purchase health insurance when they are young and healthy because otherwise they will have no coverage when they suddenly have a pre-existing condition?

    3. what about those who could have afforded inexpensive and renewable major medical health care insurance when they were young and healthy but declined to do so,

      And what about those who bought it and kept renewing it until the cost became prohibitive? If you want to make that argument you have to talk about policies that are renewable for a lifetime at sensible prices.

      Where is the insurer who will offer a 25-year-old, even one in sparkling good health, such a policy?

      1. If you want to make that argument you have to talk about policies that are renewable for a lifetime at sensible prices.

        A non-cancellable insurance policy is one where the insurer will be obliged to renew the coverage provided by the insurance policy as long as the insured party continues to make payments into that policy. This is normally used in the instances of policies which cover disability, life or health insurance so that a policy holder can be guaranteed ongoing coverage even if they should later develop a condition or conditions that increase the risk exposure of the insurance company to make payments against claims, or even if it guarantees that the insurer will have to make a payment of a benefit.

        This protects the insured party from being without insurance when they develop conditions that may need expensive long-term care, treatment or therapy for example.

        In terms of your insurance premiums a non-cancellable policy requires an insurer to maintain the existing premium no matter the eventualities faced by the insured party.

        There will be an additional charge for a policy to be non-cancellable, but if the premiums are within a person’s means then what excuse does he have if he chooses not to go this route when he is young and healthy, and then gets sick?

        1. How can anyone make a non-government, non-cancellable policy proof against actuarial misjudgment, or even corrupt gaming of the system. Why not a business model to sign up young people to such policies, collect their premiums, invest them, pocket the proceeds, and when things get more expensive, go bankrupt?

          1. Stephen,
            That is what many city pension plans have done, except that they even skip the investment step.

          2. How can anyone make a non-government, non-cancellable policy proof against actuarial misjudgment, or even corrupt gaming of the system.

            Are you arguing against all forms of private insurance and all trust in private enterprise? You buy a car with a five year warranty but this is useless because how do you know that BMW will still be here in five years? This is why investors and customers require audits and disclosure about how companies are managed. Are you saying that a non-government non-cancellable policy is too radical an idea to make economic sense?

            Why not a business model to sign up young people to such policies, collect their premiums, invest them, pocket the proceeds, and when things get more expensive, go bankrupt?

            This is a good distillation of the progressive view. Private enterprise is primarily made up of crooks whose primary goal is to cheat people. Only the government can be trusted.

        2. Definitions are nice. We can find a definition of a unicorn too.

          The issue is, first, whether such policies are actually available.

          Then we get to various practical concerns. From your link,

          “A non-cancellable insurance policy gives you peace of mind that your health, disability or life insurance will always pay benefits at the levels stipulated in the contract for the same premiums so that you will be able to continue to afford cover if you should find yourself in a long-term situation of needing care and or other financial benefits provided by your policy.”

          Ok. The word “inflation” seems to be missing here. Health care costs are hard to predict, not just because they can vary so much between individuals, but also because new technology may change them dramatically. Unless benefit levels are realistic a policy has little worth.

          Then, following up on Stephen’s comment, there are other issues. Insurers do go bankrupt, whether from evil intent, misjudgment, or bad luck. What then?

          Workers get insurance from their employer, until they are laid off. What then?

          In addition, there is a correlation between serious illnesses and big drops in earnings, which will plainly affect the ability to pay premiums. Seems like a problem to me.

          What if instead of being young and healthy the prospective insured is young and unhealthy?

          So these simple models seem to me to be not very practical.

          1. The issue is, first, whether such policies are actually available.

            Why wouldn’t they be? There is major medical insurance because most people will not need it and their premiums pay the expenses of those who do. A non-cancellable policy simply means that the insurance of the person needing it can’t be cancelled. Does this strike you as such an extraordinary increase in risk that no insurance company would be able to offer it?

            Ok. The word “inflation” seems to be missing here. ?Unless benefit levels are realistic a policy has little worth.

            If you were in the market for such a policy wouldn’t you take that into consideration?

            Insurers do go bankrupt, whether from evil intent, misjudgment, or bad luck. What then?

            Yes, but there are ways of looking into the practices and financial condition of an insurance company in order to determine their financial soundness, which is something you do before making any investment.

            Workers get insurance from their employer, until they are laid off. What then?

            It would be better for people to buy their insurance separate from their work but the government discouraged this by allowing such coverage to be provided as non-taxed compensation. There should be a mechanism for people to not lose their coverage if they opt for the non-cancellable version and they leave their job.

          2. In addition, there is a correlation between serious illnesses and big drops in earnings, which will plainly affect the ability to pay premiums. Seems like a problem to me.

            People typically handle this with disability insurance.

            What if instead of being young and healthy the prospective insured is young and unhealthy?

            Then let’s have government assist with the health care expenses of those who became unhealthy before they had a chance to purchase insurance, or people who are unable to manage their own affairs, or people who are unable to earn enough to pay the premiums. But most people are not in this category.

      2. And how does one pay his health insurance premiums after he gets sick? Disability insurance.

        1. As I said, you are spending all your time making up bad people who might get money and still be bad.

          Hypothetical freeloaders is a very weak argument for killing the whole system.
          Especially when your alternative is…screw a bunch of deserving people who are now paying for their insurance but couldn’t afford it before the ACA.

          1. Hypothetical freeloaders is a very weak argument for killing the whole system.
            Especially when your alternative is…screw a bunch of deserving people who are now paying for their insurance but couldn’t afford it before the ACA.

            The very issue that the ACA was intended to correct was the problem of people with pre-existing conditions who do not already have health insurance policies. The solution they came up with was to increase the premiums of the low-risk people (the young and healthy) to pay the higher premiums for those with pre-existing conditions and no insurance. Why do you call people deserving who ignored the need for major medical health insurance until after they needed it? They’re in the same boat as those who ignored the need for auto insurance until after the big accident. Again, I’m talking here about the people who could have afforded the insurance and who knew about the risk but chose to economize and gamble. Why do you call these people deserving?

  15. This is another problem to be solved by universal health care coverage in the United States.

    My advice to Republicans — and to Certified Official Non-Republicans Who Are Totally Not Republicans For Federal Statutory Purposes — is to come up with something as good as or better than universal coverage within a few years.

    After that, absent a health care solution from Republicans, a single-payer system seems likely to be enacted and to be as enduring as Social Security, Medicare, and Medicaid. I hope the program is named Obamacare.

    1. Ha. That’s rich.

      I wonder: what’s your metric for “as good or better than universal coverage”?

      1. The relevant metric is to persuade the American people that a Republican plan can succeed and is something other than the customary mean-spirited, half-baked, selfish, kick-the-can goobery on health care, with a superstition-laced, misogynistic kicker. Fail at that, and you’ll have universal health coverage relatively soon.

        Right-wingers have their chance. Use it, or stifle the whimpering when America improves against your wishes.

    2. “single-payer system seems likely to be enacted ”

      raising the average tax liability to every individual in the US by ~$5,000.

      People in red states will be even happier to have CA, NY, and IL subsidize their health insurance.

      1. You mean the red states who turned down Medicaid expansion? They didn’t seem too happy to have their health insurance subsidized.

        1. That may be, but the blue states are where the tax money is going to come from. That greater than average contribution will mean the those in red states (minus Texas) will pay less than average.

        2. Obama’s not President any more.

          The red states have no more reason to let their citizens suffer just to give the President a poke in the eye.

  16. The California Legislature passes a law to repeal the law of supply and demand as it applies to an economic good – healthcare. Is anyone really shocked that California is in such a fiscal abyss when it is being run by such a bunch of economically illiterate boobs?

    1. Presently CA has a budget surplus even with some money spent on the silly fast train project.

      Newsom will spent it all and 1) drive the state into debt or 2) cause large tax increases with his single payer idea that will cost between $100B to $200B annually (12% of the cost for the entire US).

      Building 100,000 low cost housing units for the homeless and operating theses will cost an add $2B to $4B annually.

      The new Federal income tax structure will really stick it to CA taxpayers, especially those who live in the bluest areas of the State where incomes and property taxes are the highest.

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