Law, Politics, and Policy Flashcards
Social Contract Theory States
That peole are born with infalliable rights, that government isnt a natural order.
People create a deal with their leaders, and how that deal works is unique to each society.
What is the size of the US Healthcare Industry?
18% of GDP
3 Trillion Dollars
What did Hobbs Think?
If we lived in a state of nature, life would be solitary, poor, brutish and short.
Govt effectively is a police state to keep us from killing one another.
What did John Locke Think?
Hobbes went too far. Thought without government, human rights would be in danger - but gov’t is at best a necessary evil, used to collect our individual rights.
Need a limited gov’t, with limited tasks
If gov’t exceeds authority, we have a right to revolt
Declaration of Independence follows whose view?
John Locke and his Social Contract Theory
Common Themes of State Constitution (4)
What should the relationship between states be?
Should we have a unified system of nations?
Bill of Rights
Congresses
3 main aspects of the Articles of Confederation
No president
each state has 1 vote
Takes 9/13 states to pass a law, but if you dont like the law, you dont have to follow it
More like a loose association, like the EU
13 separate nations with a firm league of friendship
Who called the Constitutional Convention in Philly, and with what goal?
James Madison
Said it was to amend the articles but really was to have a new constition for a united country
3 Main Issues of Constitutional Convention?
1) How to count slaves
2) Big States vs. Small states
3) Power of the Federal Gov’t
What were the issues of slavery in constitutional convention
- south out if slavery illegal
- north thought it was hypocritical to count slaves as population if they werent people in rights
- Leads to 3/5 compromise (states as 3/5 a person)
- No bans on importation of slaves for 20 yrs
- if slave makes it to a free state, he has to be returned to his owner
What were the issues of big states vs little states in the constitutional Convention?
Great compromise: Senate for additonal power for small states, house for larger states
electoral college: every state gets electoral votes of # of house reps x2
Power of the Federal Government (3 views)
1) Anti-federalists
2) Federalists
3) Middle Ground (Madisonian Democratic Republicans)
Anti-Federalists (6)
Jeffersonians Limited federal government In favor of states rights In favor of term limits Did not want professional politicians Mistrusted idea of powerful president (didnt want pres)
Federalists
Hamilton-ians
Large and strong federal government
Strong Executive Branch (president for life)
Democratic Republicans
Madison-ians Large government with checks and balances large but weak national government Should be difficult for the gov't to act Separation of powers
Why did Madison think he “won”? (3)
Enumerted powers of the Fed, but anything not enumerated is left ot the states
Checks and Balances
Big Gov’t that can do anything
Why did Hamilton think he “won”? (3)
- National Law is supreme (supremacy clause in constitution)
- Congress can pass any law necessary to enumerate its powers, and can deal wiht interstate laws (i.e. interstate commerce clause invoked broadly)
- Knew president would emerge as focal point of first govt/
What did Jefferson and Hamilton fight over during Washington’s presidency and what did Washington do about it?
1) Hamilton wants national bank, taxes, etc.
2) Jefferson wants us to align with France (true democracy)
Washington makes Jefferson Secretary of State and Hamilton Secretary of the Treasury
What do we get out of Washington’s response to Jefferson and Hamilton?
A 2 party system!
Jefferson + Madison = Anti-federalists
John Adams + Hamilton = Federalists
What did Jefferson’s election to president represent in 1800?
The first re-aligning election in America
Shift from John Adams’ federalist views to Jefferson’s states rights views… this mentalityh was pervasive until FDR in 1935
What impact did the Jeffersonian mentality have on PH?
Would have been viewed as unconstitional to create national HC or social welfare (except for a few exceptions like civil war widow’s program)
Land of limited federal government in domestic authority
What did we adopt w/ regards to the poor at the time of the constitution
British Welfare System (British Poor laws)
- If we have welfare, it should be municpally focused
- if we help anyone, should be deserving poor
- If hospitals do exists, they’re locally owned/operated
- Around this time cities started PH departments and until today its primarily a city issue
Our “Social Welfare System” - local, not federal!
What evolution did we see in HC simulateously to our adoption of the British Poor Law System
Previously had used medicine men, nurses, midwives, faith healthers, etc.
HC for most people was provided in traditional healing techniques
Still saw illness as a moral issue
What changed in HC around the end of the 1800s?
Science boomed, so doctors became king of new HC system bc they understood the science
AMA was created to lobby states to regulate HC so doctors would win and traditional healers would lose
Amount of hospital beds in US in 1900
35,000, mostly public or faith based
Amount of hospital beds in US in 1930
> 900,000
What caused this boom in hospital beds?
economic explosion of 1920s due to urbanization, industrialization, professionalization of medicine
No health insurance at the time, but people could afford to pay out of pocket bc it was the roaring 20s
HC was private sector only - not governmental
What was so terrible about the great depression for HC?
hospitals had been highly leveraged, so a lot went bankrupt
US federal govt wouldnt help bc we were still Jeffersonian in mentality - Hoover’s hands were tied.
Describe the hallmarks of the Baylor Hospital Plan
2 factors
1 pro
3 cons
*Have teachers pay between $0.50 and $1.00 a month to prepay for a hospital stay for up to 21 days free of cost.
First pre-paid system in US
Pro: Hospital saved!
Con: Kimball worries about Moral Hazard and Epidemics, Consumers dislike lack of choice (only one hospital)
Who created the Baylor Hospital idea & when?
Justin Kimball - 1930
Blue Cross - hallmarks (5)
1) 4 hospitals in Sacramento, CA
2) Can go to any of 4 hospitals if you prepay $1/mo for up to 21 days prepaid
3) BlueCross is only a fiscal intermediary - collects money and pays hospitals
4) Non-profit, could only charge community rate (no price shifting based on pre-existing conditions)
5) Didnt intervene with physician authority
Blue Shield - hallmarks
Like Blue Cross and Baylor, but for physician care.
Way to spread risk around and keep jobs during depression
Why did traditional insurers want to enter the health care market?
see the success of BC and BS, and want to get in the game
plus traditional lines of business weaker due to depression
Issue facing traditional insurers in health care market?
Hospitals wouldnt join bc they already had bc and blue shield!
What gave traditional insurers an upper leg?
didnt have to be non profit - so they could charge different rates depending upon the risk you showed
What type of insurence plan did traditional companies go with?
indemnity insurance plan - you geta bill, you pay it, you submit claim, and insurance pays you back a portion of the bill
BC and BC were __ but Traditional Insurance was ___>
BC and BS were prepaid
but Traditional Insurance was cheaper (bc could vary rates depending on risk and didnt need to charge community rate to keep non-profit status)
Why did BC BS win in the 1930s?
1) didnt have to pay a bill upfront (and it was the depression)
2) doctors would recommend them, and patients trusted docs.
…this wouldnt last though…money always talks, and experience rated/indemnity plans were always cheaper
What happened when FDR was elected?
Shift to Hamiltonian view of government
Need Federal government fueled by strong president
2nd revolution - the biggest since Jefferson in 1800, but flipping the other way.
Federal government will assume bold leadership over stress relief
What was the point of the “New Deal”
Social Contract between feds and the people
Primary responsibility rests with the local govt but the federal government has a social responsibility
What does FDR realize we need?
Federal Income Protection and a Social Welfare System
What was the issue faced by FDR in the courts?
A lot of the new deal was unconstitutional – > too much delegation to newly created executive agencies
6/9 judges were over the age of 70 –> thought it bad for pres to have power
FDR wanted to pack the supreme court to get rid of this issue - raise it to 15 people.
What saved the Supreme Court?
Owen Roberts and the “switch in time that saved 9”
started voting democratic in court rulings
allowed federal gov’t to do what it wants to regulate interstate commerce (civil rights, medicare, medicaid all justified under this clause)
interstate commerce surely at risk during depression –> increases power of fed gov’t
FDR’s 3 ideas for welfare
1) National Health Insurance
2) Pension Program for Seniors
3) Aid to Families with Dependent Children
1) National Health Insurance under FDR
- AMA fought tooth and nail .. most powerful interest group in US
- thought BCBS was enough because of fears that feds would limit what docs could earn and feds would limit docs autonomy
- doesnt happen!
Pension Program for Seniors under FDR
Social Security Act of 1935
- social insurance program, available to all regardless of income
- earned right, social insurance, uniform benefits
- Federally Run
- Everone puts in and everyone gets out
Aid to Families with Dependent Children
ADFC - also under the Social Security Act of 1935 Welfare program for poor moms and kids cash assistance welfare program state run, state administered state and federally funded welfare, not an earned right variation between states
What was FDR starting to work on at the end of his time in office?
a 2nd bill of rights - as the economy healed, some did quite well, but some were left behind
Harry Truman’s election
1945 - picks up where FDR left off - wants a “Fair Deal” for Americans
What is the main goal? NHI
What gets in the way of Harry Truman’s NHI?
Republicans in control of congress - thought we should buildup private insurance
AMA Against it
Communism now the enemy
Employers start buying it for employees!
How does Truman encourage employer insurance?
Tax breaks:
Deduct price of insurance from income tax
individuals arent taxed on value of premiums paid by companies (not counted as income)
fed effectively subsidizes insurance (forgoes 250bb/yr in process)
How does Employer Sponsored Private HI take off?
Truman gives up, goes that route
now an expected part of employment package (but many are left out)
Since so many people are left out of the employer-sponsored HI market, what does Truman do?
Pushes for public insurance safety net outside of Employer system
- > proposes amendement to SSA to have hospital insurance for the elderly
- -> republicans say no bc dont want elderly rich getting it, prefer to give states money to divide amongst poor at own discretion
Whose view wins in 1950?
Repbulican - Congress amends the SS ACT to give money to the states to provide insurance to the poor and indigent on the state level
- -> democrats said ok bc better than nothing
- -> republicans only did even this bc of election yr politics
“Welfare Medicine vs Social Insurance”
3 Revisions of Social Security Act (where feds give states money)
1950: insurance for poor and indigent
1960: insurance for elderly poor
1962: insurance for poor disabled (AMA actually supports this)
only 5 states were really taking advantage of this $, progress cost less than expected
1964 - Johnson Wins landslide Election!
Major Mandate and following proposals:
Great Society and War on Poverty –> Health Insurance Focus!
3 Proposals:
1) Johnson - Hospital Insurance for the Elderly
2) Republicans – Give states more $ for poor
3) John Burns – Physicians Insurance for the Elderly
1965 - what idea of the 3 on table at Johnson’s election win?
all three!
Details of Johnson’s Proposal
Medicare Part A
Available to Anyone over age of 65 in the US, or with disabilities
Universal benefits for all (Social Insurance of New Deal)
Details of Republicans Proposal
Money for states to help poor –> MEDICAID
Means tested needs based, state discretion, charity stigma
Serves 66 million Americans
Under ACA will have millions more
Expect to cover between 70-80mm annually (25% of US) within 5 years
Costs 450bb annually (NY State most expensive)
Welfare Wing of New Deal
Details of John Burns
Medicare Part B
Major expansion of govt in health insurance
Track New Deal Social Insurance
Medicaid How it works
Fed gives states money (50-80% fed covered)
State designed
State administered
The poorer the state per capita/more feds pay
What characterized uptake of medicare/two visions?
High Eligibility Standards and slow uptake: i.e. AZ last state to join in 1982
Low eligbility model, ie.– NY spent so much that it outspent what had been set aside for whole program
both led to a capping of budget - feds will only pay for beneficiareis w/in fed eligibility criteria, and for benefits approved by fed
What did medicare cover?
Whatever the states decided, outside of 10-12 required things
What does Regan do when he gets into power?
Cuts core social service programs - cuts welfare, cuts taxes, increases defense
3 tangents that led to medicare increase under Regan?
Mid 1980s - Southern Democrats want new Democratic Party in the south
Fillibusters - any 60 senators can block one, so need 60 votes to pass any law
Budget bill is set so you cant filibuster a budget, and it only takes 50 votes to pass a budget bill
What did the new southern democrats want?
improved education system
try to reduce infant mortality – to do so lobbied congress to be able to extend medicaid (currently covering only those at 30% of poverty level) to preganant women up to 133% of the poverty level
How did Regan get his early revolution?
David Stockton realized you could pass stuff under budget bills bc they couldnt get filibustered
How did this backfire on Regan?
2 can play that game!
Henry Waxman notices Regan and sees what the south did to expand medicaid – gets NHI through the back door!
Once they get NHI through the back door, what happens?
mandate all states cover pregnant women and infants up to 100% –> 133% of the poverty level… then all kids up to 100% of poverty level
Delinks medicaid from welfare, become a program for low wage and low income kids
What led to medicare cost jumping in ealry 1990s?
Intragovernmental tension follwoing medicaid mandates… states had to pay for this at the time of recession and lower income and war.
Led to figure manipulation!
What did West Virgina do to figure manipulate?
Have hospitals charge more for a procedure - 100–>140
Feds reimburse States 70 bucks
Hospitals pay states $30 tax or make $30 donation
Hospitals net $110 now, but states only pay $40…
Hospitals and States win, and Feds lose
What did Pennsylvania do to figure manipulate?
Have nursing homes charge 697mm for care
Have state draw down $393mm on line from Feds
Have nursing homes give back 695mm (pocket 2mm)
Have states net 391mm
What other states were mentioned in figure manipulation
NH got away with no income tax bc of games like this
MA got rid of a 450mm budget deficit bc of stuff like this
What are Bills wishes on NHI when he gets into office?
Doesnt like Medicaid Mandates Doesnt like states leveraging techniques Wants NHI through front door Hillary to lead task force Gets congress to impose limits on leveraging games (i.e. limit large state donations, etc.) Clinton Loses
What happened in 1994 when Gingrich and the republicans take over the house?
Counter revolution again!
