Complete Test Bank Medical Care Reform in the Ch15

Chapter 15: Medical Care Reform in the United States

This chapter explores the nature of the medical care reform movement in the United States: the pressures behind the movement, the goals of reform, and the alternative strategies competing for acceptance. One potentially controversial discussion is the one on the right to medical care. While some may be uncomfortable with addressing the “rights” issue, it is nonetheless an essential element in the future of health care delivery in the United States.

Chapter Outline

1. The push for reform
2. The moral issues: Is medical care a “right”?
3. The goals of reform
4. Who is covered
5. What is covered
6. Who pays and how much
7. Policy options
8. Single-payer national health insurance
9. Mandated insurance coverage
   1. Employer-Mandated Insurance
   2. Individual Mandates
10. Market based alternatives
    1. The Market Approach
    2. Consumer-Directed Health Plans
11. Managed Competition
12. The Patient Protection and Affordable Care Act
13. Key Elements of the ACA
14. Major Accomplishments and Their Unintended Consequences
15. A sustainable market-based solution
16. A System at the Crossroads
17. Summary and conclusions

Profile: Alain Enthoven

Chapter Objectives

1. Explain the causes of the push for health care reform in the U.S. and abroad.
2. Summarize the major issues in considering medical care access as a right.
3. Summarize the goals of health care reform—improved access, better outcomes, and lower costs.
4. Explain the impact of state mandates on the cost and availability of health insurance.
5. Describe the policy alternatives available to U.S. policy makers, including managed competition and medical savings accounts.

Teaching Suggestions

1. Many people do not feel comfortable discussing “rights” in the context of access to medical care. I believe that it is an important discussion with real substance. The fact that most politicians avoid the issue reinforces my beliefs. While you will not reach agreement on the issue, it is important to get students thinking about the rights issue. Make sure that students who believe that we have a right to medical care have a clear understanding of what they mean by a “right.”
2. Reiterate the goals of a health care system—Who’s covered, what’s covered, who pays, and how much? Students tend to be a bit simplistic in their approach to change. Make sure they are aware of the overriding implications of a system change.
3. Most state legislatures have initiated some type of change in their system of delivery or financing in recent years. Your students will probably appreciate a brief summary of some of the changes that your state legislature has enacted recently.
4. In the fast-changing world of health care reform, it is difficult to know which policy alternatives to feature. While the old standbys are discussed, check the Internet web site regularly for updates on the current state of the legislative process.

Suggested Approaches to End-of-Chapter Questions

1. Federal authorities have much more power in determining the future direction of health care reform. One of the biggest hurdles for state government is ERISA which preempts state governments from mandating employers cover their workers and limits the states’ ability to regulate self-insured plans. State governments are closer to their citizens and likely more responsive to local needs than the federal government. State experiments seem wise.
2. Probably both.
3. The major Key elements of the ACA are discussed beginning on page 464.
4. Students should have enough background in health care economics and reform to come up with their own plan at this stage in the course.
5. Halfway measures may doom us to the worst of both worlds. The political will to stay a particular course reduces uncertainty and improves outcomes.
6. Spending large sums to extend life under all circumstances is a prescription for maintaining a high level of spending. Uniformly applied standards for end-of-life care could save some money. Whether it would make a significant difference is not clear.
7. This question addresses the issue of the provision of a safety valve. Are we willing to accept a multi-tiered system? Those who realistically look at the situation in most countries conclude that no system exists where resources are uniformly distributed. Those with more money will always be able to get more medical care and more fancy cars.
8. The elderly and indigent have a legal right to medical care created by federal entitlement programs, including Medicare and Medicaid. If you define rights according to the natural rights philosophy, if you don’t pay for it, you have no right to it. Hawaii has gone one step further by mandating coverage (thanks to an ERISA exemption) and Oregon has set limits on Medicaid spending based on cost effectiveness.

Additional Questions for Discussion and Evaluation

1. In the Spring 1995 issue of Health Affairs Mark Pauly and John Goodman discuss their proposal for using medical savings accounts and tax credits as part of an incremental approach to health care reform. Deborah Chollet comments and the authors respond in the Summer 1995 issue. Examine the main arguments Pauly and Goodman use in support of MSAs. What are Chollet’s main arguments against MSAs?
2. The Summer 1995 issue of Health Affairs presents two views on Singapore’s experience with medical savings accounts, one by William C. Hsiao and the other by Thomas A. Massaro and Yu-Ning Wong. Examine these two different perspectives and comment on whether MSAs could work in the United States.
3. President Clinton’s health care reform plan used price controls as one of its basic means of controlling spending. The controls included fee schedules in the fee-for-service sector, limits on the absolute level of health insurance premiums and their allowable year-to-year increases, and prospective budgets for regional health alliances. Review the case for and against price controls in medical care. Under what circumstances will they work? Do these circumstances exist in medical markets?
4. A slightly different perspective on the fairness issue requires that we look at the dynamics of a multi-tiered system. Are current recipients of the collectively-provided plan likely to remain at the basic benefits level, or is there mobility within the system? [Answer: As individual circumstances change--job changers, job movers, job losers, new hires--it is reasonable to expect that individuals will have their eligibility for the collectively-provided plan affected. From our discussion of the dynamics of the uninsured population, remember that while 15 percent of the U.S. population are uninsured at any one time, only about four percent are chronically uninsured. Thus, it is highly likely that participation in the collectively-provided basic benefit plan will be a temporary phenomenon for most recipients, just like being uninsured is temporary for most people now.]
5. Suppose a law is passed mandating that every employer provide health and disability insurance for employees suffering a heart attack. Who would benefit from such a law? Who would be hurt? Who would pay for this employee benefit? (If you suffered from a heart condition or had a family history of heart disease, would you advertise this fact to prospective employers?)
6. States have traditionally served as incubators for new ideas and approaches to health care delivery. Mitt Romney, former governor, along with a Democrat-controlled Massachusetts legislature rolled out a state reform plan in 2006 that served as a blueprint for the Affordable Care Act.
7. Describe the main features of the Massachusetts plan.
8. What are the economic implications of the approach? Has it worked as planned to increase access? To control spending?
9. What can we learn from the Massachusetts experiment that will help us formulate a national strategy?
10. Public support for a patients' bill of rights is significant because the benefits can be easily identified – health plans are less likely to say no to treatments – but costs are not as easily identified – the increase in premiums, deductibles, and copayments, or the employers who drop employer-sponsored health insurance. Do you agree or disagree? Explain.
11. Outline the arguments that favor implementation of a universal healthcare program? Who should pay for the coverage?
12. Do state mandates of the coverage of, for example, in vitro fertilization and hearing aids have a cost? If so, what is the opportunity cost? Discuss the tradeoff between the amount of coverage and the number of people covered?
13. Should the states be in the business of mandating insurance coverage? Do these regulations make consumers better off or worse off?

Structured Discussion:

Resolved: The United States should immediately enact some health plan that covers the entire population.

Resolved: The United States should seek universal coverage through a broad-based tax with subsidies for the poor and the sick.

Resolved: The United States should seek universal coverage through employer mandates with subsidies for the poor and the sick.