Employment-Based, For-Profit Health Care in a Pandemic.

The emergence of Covid-19 in the United States has revealed a critical weakness in the health care system in the United States. The majority of people in the nation receive health care via employment-based health insurance from providers in a competitive market. However, neither employment-based health care nor a competitive health care market can adequately provide treatment during a global pandemic. Employment-based health care will fail to provide care for a large number of people in any destabilizing economic event, including a pandemic. Competitive for-profit health care systems distribute limited goods based on markets rather than health care needs. If a global pandemic results in unusually high demand for specific medical supplies, then these will be distributed suboptimally. The combined risk of suboptimal distribution of needed goods and a significant drop in health care access in a global pandemic indicates that the U.S. health care system has serious vulnerabilities that need to be addressed.

Scaling cost-sharing to wages: how employers can reduce health spending and provide greater economic security.

In the employer-sponsored insurance market that covers most Americans; many workers are "underinsured." The evidence shows onerous out-of-pocket payments causing them to forgo needed care, miss work, and fall into bankruptcies and foreclosures. Nonetheless, many higher-paid workers are "overinsured": the evidence shows that in this domain, surplus insurance stimulates spending and price inflation without improving health. Employers can solve these problems together by scaling cost-sharing to wages. This reform would make insurance better protect against risk and guarantee access to care, while maintaining or even reducing insurance premiums. Yet, there are legal obstacles to scaled cost-sharing. The group-based nature of employer health insurance, reinforced by federal law, makes it difficult for scaling to be achieved through individual choices. The Affordable Care Act's (ACA) "essential coverage" mandate also caps cost-sharing even for wealthy workers that need no such cap. Additionally, there is a tax distortion in favor of highly paid workers purchasing healthcare through insurance rather than out-of-pocket. These problems are all surmountable. In particular, the ACA has expanded the applicability of an unenforced employee-benefits rule that prohibits "discrimination" in favor of highly compensated workers. A novel analysis shows that this statute gives the Internal Revenue Service the authority to require scaling and to thereby eliminate the current inequities and inefficiencies caused by the tax distortion. The promise is smarter insurance for over 150 million Americans.

Moral hazard matters: measuring relative rates of underinsurance using threshold measures.

OBJECTIVE: To illustrate the impact of moral hazard for estimating relative rates of underinsurance and to present an adjustment method to correct for this source of bias. DATA SOURCES/STUDY SETTING: Secondary data from the 2005 Medical Expenditure Panel Survey (MEPS) are used in this study. We restrict attention to households that report having employer-sponsored insurance (ESI) for all members during the entire 2005 calendar year. STUDY DESIGN: Individuals or households are often classified as underinsured if out-of-pocket spending on medical care relative to income exceeds some threshold. In this paper, we show that, without adjustment, this common threshold measure of underinsurance will underestimate the number with low levels of insurance coverage due to moral hazard. We propose an adjustment method and apply it to the specific case of estimating the difference in rates of underinsurance among small- versus large-firm workers with full-year ESI. DATA COLLECTION/EXTRACTION: Data were abstracted from the MEPS website. All analyses were performed in Stata 9.2. PRINCIPAL FINDINGS: Applying the adjustment, we find that the underinsurance rate of small-firm households increases by approximately 20 percent with the adjustment for moral hazard and the difference in underinsurance rates between large-firm and small-firm households widens substantially. CONCLUSIONS: Adjusting for moral hazard makes a sizeable difference in the estimated prevalence of underinsurance using a threshold measure.

Health risk reduction programs in employer-sponsored health plans: Part II-law and ethics.

OBJECTIVE: We sought to examine the legal and ethical implications of workplace health risk reduction programs (HRRPs) using health risk assessments, individually focused risk reduction, and financial incentives to promote compliance. METHODS: We conducted a literature review, analyzed relevant statutes and regulations, and considered the effects of these programs on employee health privacy. RESULTS: A variety of laws regulate HRRPs, and there is little evidence that employer-sponsored HRRPs violate these provisions; infringement on individual health privacy is more difficult to assess. CONCLUSION: Although current laws permit a wide range of employer health promotion activities, HRRPs also may entail largely unquantifiable costs to employee privacy and related interests.

Financial penalties for the unhealthy? Ethical guidelines for holding employees responsible for their health.

As health care costs continue to rise, an increasing number of self-insured employers are using financial rewards or penalties to promote healthy behavior and control costs. These incentive programs have triggered a backlash from those concerned that holding employees responsible for their health, particularly through the use of penalties, violates individual liberties and discriminates against the unhealthy. This paper offers an ethical analysis of employee health incentive programs and presents an argument for a set of conditions under which penalties can be used in an ethical and responsible way to contain health care costs and encourage healthy behavior among employees.

An ethical template for pharmacy benefits.

We propose an ethical template for pharmacy benefits and a fair process for using it. The template delineates four levels of decisions about pharmacy coverage, connecting ethically acceptable types of rationales for limits with decisions made at each level. It provides a framework for organizing ethically relevant reasons for coverage (or the tiered copayments). The process for using the template assures accountability for the reasonableness of benefit decisions. It requires transparency and relevance of rationales for limit setting and revisability of decisions, including through fair procedures for appeals. The template and the process facilitate broader public learning about fair limit setting.

Providing employer-arranged occupational medical care: conflicting interests.

It is said that ethics comprise principles of good conduct or standards governing the conduct of the members of a profession. These standards are unbending and strict, yet the reality is that occupational health professionals are subject to many conflicting pressures. Most of these stresses arise from the fact that employers and insurance companies, not worker-patients, fund OH services, and these two entities have overlapping, yet distinct, interests. OH professionals must consider the health and safety of individual workers as their top priority, while also addressing myriad other concerns. This is the moral challenge confronting practitioners.