Hospital Chargemaster Insanity: Heeling the Healers

Article by: George A. Nation III

43 PEPP. L. REV. 745 (2016)

Hospital list prices, contained in something called a chargemaster are insanely high, often running ten times the amount that hospitals routinely accept as full payment from insurers. Moreover, the relative level of a particular hospital’s chargemaster prices bears no relationship to either the quality of the services the hospital provides or to the cost of the services provided. The purpose of these fictitious list prices is to serve as a starting point or anchoring point for negotiations with third-party payers regarding the amount that they will actually pay the hospital for its goods and services.

Ironically, there is widespread agreement, even on the part of many hospital administrators, that the prices reflected on chargemasters are ludicrously high and are set in an arbitrary and capricious manner. Hospital administrators often argue that this does not matter because no one really pays chargemaster prices. In this contention, however, hospital administrators are mistaken. These insanely high chargemaster prices cause myriad problems throughout the healthcare system. For example, often self-pay patients are in fact expected to pay these exorbitant charges because many hospitals refuse to reduce their charges for many self-pay patients. As a result, debt collectors, often working on behalf of so-called charitable hospitals, hound many self-pay patients mercilessly, to the point of bankruptcy, in a usually futile attempt to collect these outrageous charges.

In addition, chargemaster prices increase constantly and create upward pressure on pricing throughout the healthcare marketplace, resulting in overall higher prices. This is borne out by the fact that over the last ten years increases in the price for hospital care, along with price increases for drugs and medical devices and not intensity of service or demographic change, produced most of the increase in healthcare’s share of GDP.  High chargemaster prices is one of the reasons that healthcare in the United States is more expensive than any other developed country. Also, the chargemaster pricing system contributes significantly to a lack of price competition in healthcare, which exacerbates the problem. That is, the chargemaster system makes meaningful comparison-shopping by patients on the basis of price impossible because it all but eliminates price transparency, encourages complex and meaningless (to the patient) à la carte pricing, and contributes to rampant price discrimination.

Creating a more competitive healthcare market is necessary in order for the United States to continue to provide the highest quality healthcare in the world. The chargemaster pricing system has been a significant factor in the destruction of the competitive market for healthcare. I argue here that the government needs to step in, not to take over responsibility for providing healthcare, but just the opposite, to eliminate the chargemaster pricing system and allow a more competitive market in healthcare to flourish, which will allow each individual to take greater responsibility for their own acquisition of healthcare goods and services. The purpose of the solution I argue for here is to empower individuals to force hospitals to compete on the basis of price and quality.

Considering Consequences: Autonomy’s Missing Half

Article by: Catherine A. Hardee

43 PEPP. L. REV. 785 (2016)

In a subtle but discernible trend, courts, commentators, and policymakers increasingly use autonomy-based justifications to support expanding economic rights. Their use of autonomy, however, is inconsistent with the concept of traditional liberal autonomy that proponents of economic rights embrace. This is because many, if not most, economic choices have some measure of consequences ameliorated by state action.

This Article exposes the conceptual incoherence of this approach and argues that these autonomy-based arguments are invalid when they fail to acknowledge the vital role consequences play in constituting liberal autonomy. It also demonstrates that the failure to account for consequences in determining the value of a choice creates conceptual and practical problems that can unnecessarily hamper effective regulations while simultaneously undervaluing true autonomy. To do so, this Article uses the Supreme Court’s landmark NFIB v. Sebelius decision and the debate over privatizing Social Security as case studies to critique autonomy-based arguments used to justify economic rights in circumstances where consequences are artificially constrained. This Article then provides an alternative consequence-focused framework for evaluating the regulation of such choices. Finally, this Article applies that framework to demonstrate that considering consequences helps ensure a more robust protection of true autonomy while still providing policymakers flexibility to address social issues.

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Children’s Anatomy v. Children’s Autonomy: A Precarious Balancing Act with Preimplantation Genetic Diagnosis and the Creation of “Savior Siblings”

Article by: Marley McClean

43 PEPP. L. REV. 837 (2016)

On February 3, 2015, Members of the United Kingdom’s Parliament, in an historical move, voted to approve the creation of human beings from three different parents, i.e., the creation of three-person DNA.   In doing so, it became the first country ever to approve laws regulating such a procedure.  The procedure uses a customized version of in vitro fertilization (IVF) to mix the DNA of two parents with the healthy mitochondria of a donor woman. While three-person DNA is not yet practiced in the United States, there is a controversial ART procedure practiced and unregulated in the United States that also provides a “light at the end of the tunnel” for parents. It is called Preimplantation Genetic Diagnosis (PGD).

One prevalent use of PGD is for the creation of “savior siblings.” A couple creates a savior sibling when they have a severely sick or dying child who needs a tissue or organ donation. This couple will undergo IVF, and doctors will then use PGD to pick an embryo that will be the near-perfect genetic organ or tissue match for the sick sibling.

Savior siblings present many ethical and legal dilemmas—dilemmas that become more glaring when examining the virtually unregulated legal landscape of PGD in the United States. This Comment identifies those ethical and legal dilemmas and gaps in the law, and suggests a change in the legal framework regulating informed consent of minors and tort law, rather than a total ban on PGD.

Sticks and Stones May Break My Bones, But Words Will Always Hurt Me: Why California Should Expand the Admissibility of Prior Acts of Child Abuse

Article by: Lindsay Gochnour

43 PEPP. L. REV. 417 (2016)

Child abuse is an undeniably prevalent problem throughout the United States, and studies show that instances of abuse are occurring at a rampant pace. While physical child abuse has been recognized in this country for decades, psychological child abuse has just recently begun to receive legal, medical, and social attention.  Despite growing recognition and concern, victims of child abuse whose injuries are psychological, are emotional, or do not result in a “traumatic condition,” do not have the same legal protections in a courtroom as a child who was strangled or physically beaten.

As the law presently stands in California, only prior acts of child abuse resulting in a “traumatic condition” are admissible in a subsequent child abuse trial.  While this is a step in the right direction, the extremely narrow limitations of this statute leave thousands of psychologically abused children behind without the same legal recourse as other victims.  Unfortunately, this means that even if these children are brave enough to report their abuse and miraculously receive the outside support necessary to prosecute their case, their chances of receiving any form of justice, or even seeing their perpetrator prosecuted, are horribly low.

This Comment seeks to explore the effect that the admissibility of prior bad acts evidence would have on child maltreatment cases and the benefits that would be afforded to child abuse victims if they were provided the same legal protections as victims of other crimes.  This Comment argues that expanding the California Evidence Code to allow the admission of prior acts of psychological and emotional child maltreatment would make great progress for the protection of child abuse victims and the prosecution of their (often losing) cases.

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Surviving the Borrower: Assumption, Modification, and Access to Mortgage Information After a Death or Divorce

Article by: Sarah Bolling Mancini & Alys Cohen

43 PEPP. L. REV. 345 (2016)

The death of a borrower too often brings the surviving spouse or other heirs to the brink of foreclosure. Transfer of the marital home to a non- borrower spouse through divorce may lead to the same problems. Mortgage servicers tell these successor homeowners that because they are not the borrower on the loan, they are not entitled to any information about the mortgage secured by their home and cannot apply for a loan modification, even if they are struggling with the payments. In fact, successors have a right to information, the right to assume liability for the loan, and the right to apply for a modification.

In the midst of the foreclosure crisis, many academics have examined state-specific laws, mortgage securitization, and the financial incentives that impede efforts to mitigate foreclosures. No scholarly paper has explored the legal issues affecting successor homeowners who seek information and payment relief after a transfer of the family home.

This Article provides a comprehensive discussion of the federal privacy regulations, statutory limits on enforcement of due-on-sale clauses (specifically the exceptions contained in the Garn-St Germain Act), state contract law, and federal loan modification programs that determine the rights of this vulnerable population. In a time of increased focus on regulation of mortgage lenders and servicers, we also recommend policy changes that would clarify existing rights and better prevent avoidable foreclosures.

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Surrogacy as the Sale of Children: Applying Lessons Learned from Adoption to the Regulation of the Surrogacy Industry’s Global Marketing of Children

Article by: David M. Smolin

43 PEPP. L. REV. 265 (2016)

This Article argues that most surrogacy arrangements, as currently practiced, constitute the “sale of children” under international law and hence should not be legally legitimated. Therefore, maintaining the core legal norm against the sale of children requires rejecting claims that there is a right to procreate through surrogacy. Since a fundamental purpose of law in the modern era of human rights is to protect the inherent dignity of the human person, a claimed legal right that is built upon the sale of human beings must be rejected.

This Article refutes common arguments claiming that commercial surrogacy does not constitute the sale of children and should be legally legitimated. Upon analysis, those arguments, and the corollary legal regimens legitimizing a commercial surrogacy industry, are thinly veiled rationalizations for accepting commercial arrangements involving the de jure and de facto transfer of infants in exchange for monetary compensation.

This Article describes the minimum regulatory approach under which the practice of surrogacy would not constitute the sale of children. This Article argues that legal principles applicable to adoption, which are designed to protect vulnerable birth parents and children and to prevent human trafficking and the sale of children, should be adapted and applied to surrogacy.

Comparison to adoption is also useful in revealing the hidden hypocrisy of the surrogacy industry. Surrogacy industry proponents claim to reflect a progressive acceptance of new means of family formation, but in fact advocate for a retrograde and pseudo-traditionalist set of legal rules that cut off significant rights of surrogates and surrogate-born persons to information, autonomy, and relationship. In a context where birth parents and adoptees are gaining new rights in the context of adoption, surrogacy proponents seek to build an industry which empowers intended contractual parents and profit-seeking intermediaries at the expense of the rights of surrogates and surrogate-born persons.

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