It is unusual to welcome the filing of a lawsuit. Many of them are a tribute to the abandonment of common sense. Sometimes, though, a lawsuit can clarify an issue in a way no other institution in our society can.
Just recently we have been blessed with not one but two lawsuits that have the potential to answer a serious question about our health care system financing. It is an economics question, but like so many medical issues there are many side effects.
The two lawsuits are different, but at the heart of the litigation are the same fundamental questions: Who gets to control the costs of medical care? And who is responsible for the consequences of exerting that control?
In its opening session the U.S. Supreme Court heard oral arguments in a consolidation of three cases, two originating in California and one in Pennsylvania.
The issue that most interests the court is whether individuals and health care providers have the right to sue federal or state authorities if their medical care has been diminished by moves to cut costs.
In the California cases, health care providers — an assisted living facility and a professional group representing pharmacists — sued the state government after it lowered the payments for services it would make to providers. We are all aware of California’s financial problems, and the Medicaid cost-cutting step was one of many taken in an effort to balance the budget.
The Pennsylvania case involves an individual Medicaid recipient who had decided to “cut to the chase” and sue the U.S. government because its cost-cutting actions caused the problem in the first place. It is also somewhat different because the Medicaid recipient, as we might expect, has little income and is represented, as a matter of public interest, by the Pittsburgh public defender’s office.
In the Medicaid legal environment there is a marked difference between individuals and providers. Individual recipients would not benefit financially if their legal argument prevailed in a lawsuit.
Health care providers, of course, are very different from individuals since they are part of a system of Byzantine complexity and a cost accounting system designed in a collaborative effort by Franz Kafka and the Queen of Hearts.
Both federal and state governments tend to view health care providers as a potential source of cost reductions. This belief is based on real and imagined inefficiencies — in hospitals, clinics, primary care and residential facilities — and justifies reductions in payments for services by assuming that “they will find a way” to provide the same care with less money.
Whether the belief is justified or not has been a matter of considerable argument, but the government’s faith in the cost-cutting process has been strengthened mightily by expediency. Our country’s recent economic distress has left gaping holes in federal, state and local budgets.
The second lawsuit with major implications for health care involves precisely this type of public budget cutting. The Washington state Chapter of the American College of Emergency Physicians has filed a lawsuit against the state in response to recent reductions in what it will pay for medical treatment provided by a hospital emergency room.
The reductions were part of the budget-conscious work of the Legislature but the approach taken is very different from California’s. Instead of directly reducing the reimbursement payments, government chose to define the medical problems that qualified as emergencies — there’s an official list of just over 700 — and limit the number of nonemergency treatments it would pay for to three per year.
It looks like a great idea — on paper. In an actual emergency room, it is another matter. People who show up with an arrow sticking out of their chest or a hatchet lodged in their femur won’t be affected by the change. But someone with “nonspecific chest pain” or even “nonspecific congestive heart failure,” might not qualify for Medicare reimbursement of the costs.
The problem for the hospital is a trifecta: medical, legal and economic. From a medical standpoint, a lot of emergencies involve pain or other symptoms that are nonspecific until later, after treatment.
From a legal standpoint, hospital emergency rooms are required to treat people. That is why they are filled with people who have no other way to obtain medical care, and it is why emergency rooms are closing down at an alarming rate.
Maybe hospitals and other health care providers will “find a way” or maybe not. These lawsuits are going to clarify what individuals and health care providers can do to have their voices heard in court as federal, state and local governments freeze their medical care budgets and hope for a cure.
James McCusker is a Bothell economist, educator and consultant. He also writes a monthly column for the Snohomish County Business Journal.
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