“We hold that the trial court erred by excluding expert testimony regarding undisclosed medical risks that had not materialized.”
In Tennessee, informed consent depends on what a reasonable patient would need to know in order to make a reasonable decision in regards to medical treatment. The patient must be told his diagnosis or the nature of his ailment, the reasons for the proposed treatment or procedure, the risks involved and the prospects for success, and alternative methods of treatment along with the risks and benefits of such treatment. The patient must also be told if the treatment is considered to be experimental.
The informed consent standard used in Tennessee is the “objective patient” standard and this is the same standard used in the 1992 Code of Medical Ethics used by the American Medical Association. Only the practitioner is competent to explain the goals, risks, and benefits for the particular patient. This process cannot be delegated to another person.
A recent decision of the Tennessee Supreme Court, Ike White v. David Beeks, M.D., has threatened to turn this consent process on its head.
Facts of the Case
Ike White, a 19 year old, had chronic back pain related to a fall down a flight of stairs, injuries suffered while lifting a 200 pound car transmission, and injuries incurred in a three-wheeler accident.
In May 2006, Dr. David Beeks operated on Mr. White’s lower back; the discs were fused to stabilize the spine. To help with the stabilization, a bone grafting product, “InFuse”, was used.
Although Mr. White’s pain improved after the operation, it recurred about six weeks later. An evaluation of the pain showed that ectopic bone had formed at the spinal stabilization site.
On July 6, 2007, a health care liability suit was filed against Dr. Beeks. The suit alleged that the InFuse caused the ectopic bone growth which put pressure on the nerves in Mr. White’s back. Mr. White testified that Dr. Beeks had never discussed the risks associated with InFuse, and, in fact, had never even used the words “InFuse.” Mr. White said that alternatives to InFuse were not discussed nor was the risk of not using InFuse to help with the fusion.
Mr. White’s medical expert, Dr. Melvin Law, testified that “Dr. Beeks should have described the relative advantages of InFuse, the complications associated with its use, the potential to increase the chance for a successful fusion when using InFuse versus not, and the manner in which InFuse would be used”. Plaintiff’s expert also testified “that Dr. Beeks should have disclosed to Mr. White that the main risks of using InFuse were nerve pain, irritation, and ectopic bone growth.”
It was plaintiff’s theory that this pressure on the nerves was what was causing the back pain. It was alleged that the InFuse had been negligently placed. It was also alleged that Dr. Beeks did not get an informed consent from Mr. White since all of the possible complications of InFuse had not been discussed so that Mr. White could give an informed consent.
During the trial, the Court granted a motion which limited the Plaintiff’s expert’s testimony to only the risks of InFuse that allegedly occurred and caused Mr. White’s injury.
The jury came to the conclusion that the injury was not related to the InFuse since there was undisputed testimony that ectopic bone formation had never been shown to result in neurologic injury for this type of case. Even if InFuse had caused the ectopic bone growth, the pain was not due to this bone deposition.
After the jury verdict, the Plaintiff appealed, arguing that a new trial was warranted because the trial court erred in not allowing Dr. Law’s testimony relating to risks that had not occurred in this case. The plaintiff made the argument that he would never have consented for the procedure if all of the significant risks had been disclosed; including the ectopic bone formation.
The Appellate court agreed with the trial court but the opinion was divided. The Tennessee Supreme Court took the case and ruled for the Plaintiff. The Tennessee Supreme Court wrote, “[A] physician would be liable to a patient for injuries resulting from a procedure, “regardless of whether such injuries resulted from negligence or otherwise” when informed consent had not been obtained.”
So it came down to an issue of informed consent and it did not matter if the complication (injury) suffered had been discussed in the consent process. If all material complications had not been discussed, then the jury should make a decision as to whether the consent process was adequate or not. Since the trial court did not allow the plaintiff’s expert to opine on what he felt were complications not discussed in the consent process, then the jury could not have made an informed decision if the process was adequate or not.
The Court ruled that this error, more probably than not, influenced the jury’s verdict. As such, the plaintiff was awarded a new trial.
The bottom line is that the physician must make a “full disclosure” of any facts necessary for a patient’s “intelligent” consent for a proposed treatment. Obviously, the term “full disclosure” is open for interpretation. With this holding, it will be difficult, if not impossible for the clinician to go over every “material” complication associated with a procedure, especially if medical devices are to be used.
It is possible that I may be reading too much into this decision. It seems unlikely that the Court intended for every conceivable risk be discussed with the patient. Perhaps just the risks that a reasonable physician in the same or similar community would discuss in the process of getting informed consent are required. But what risks would be relevant for that particular patient in coming to an informed consent? What we do know from this decision is that the injury suffered, even if it was discussed in the informed consent process, may not be enough to win on the informed consent issues.
It will take time for the Court to clarify this holding. In the meantime, plaintiff’s attorneys in Tennessee are likely to include an “informed consent” theory in future medical malpractice cases.
White v. Beeks No.E2012-02443-SC-R11-CV Filed May 18, 2015.
 InFuse is a human-engineered protein which stimulates bone growth. This ectopic bone is supposed to help in the fusion process.
 Ectopic bone is bone that presents at an abnormal site.
White v. Beeks No. E2012-02443-SC-R11-CV Filed May 18, 2015.
The Affordable Care Act (ACA) was enacted to ensure that most people would have access to affordable health care insurance and to decrease the high cost of health care in our country. I have previously written about the Independent Payment Advisory Board (IPAB) and the role they will play in decreasing costs, but it looks like Health Care Insurers are already acting to cut payments without even waiting for guidance from the IPAB.
Highmark, a Blue Cross and Blue Shield provider that has programs in Pennsylvania, Delaware, and West Virginia has recently announced that they will be cutting payments to their participating physicians because of mounting losses from the plans they have provided through the ACA exchanges in those states. Highmark has found that they are paying out more in claims than they are collecting in premiums. This is not surprising as many healthy patients have chosen to opt out of health care insurance until they need it. Without participation from healthy patients who pay premiums but don’t use much health care, the losses were predictable.
Highmark claims they lost $221 million in 2014 and are projected to lose another $500 million in 2015 because of the mismatch in claims and premiums. In the original ACA plan, recognizing that health insurers may be facing some significant losses until the system comes into balance, the Act originally had federal subsidies which were meant to offset losses for the first three years of the Act. However, the Congress, which is now under Republican control, has blocked the administrations access to these funds for the time being. As a result, companies like Highmark are only getting 13% of the subsidy money they were counting on; which was projected to be $220 million in 2014. Even though 13% of the money was made available, Highmark has not yet received any of their shares.
As a rational business, these losses will be handled by pay cuts to the physicians who are Highmark providers. Of course, Highmark could spread some of the losses to the participating hospitals but they have chosen not to do this. Apparently, cutting reimbursements to hospitals would require hospital specific negotiations whereas the doctor contracts are more flexible and “adjustments” are already built in to the present contract structure.
Highmark could have taken the losses and remained viable by dipping into their reserve funds and they have done this in the past, but they have now decided that subsidizing money-losing exchange plans is no longer a reasonable option.
Highmark is not the only insurer that is losing money under the ACA. I have previously written about Kynect, the Kentucky exchange which is talking about abandoning their state exchange altogether. The United Health Group has recently reported a $720 million loss for 2015. If they don’t see a financial turnaround soon, it is predictable that they will pull out of the exchanges. Other insurers such as Aetna and Anthem are also losing money on the exchanges.
The insurers are facing increasing losses because the patients opting into insurance purchases are a riskier pool than the insurers had originally anticipated. Highmark has shown that the congestive heart failure rates for those among the ACA purchasers was 43% higher than for members of their regular commercial plans. Chemotherapy claims per ACA users has been found to be 49% higher than the regular commercial users. These patients have high cost for care and the premiums paid by these patients (due to community ratings) does not cover the costs.
To remain in business, the insurers will need to increase their premiums and decrease their payments on claims. Decreased payments can be done by increasing deductibles on the plans as well as paying less for each claim made. It is hoped that more healthy people will opt into buying health insurance since the penalty (tax?) for not having health insurance is scheduled to rise. However, if the penalty is still significantly less than the premiums, it is unlikely that a rational healthy person will participate in the exchanges. This is even more likely due to “guaranteed issue” which allows a person to buy insurance at any time; this means he can wait until he is sick to buy the needed insurance.
Another strategy being used by the insurers is to deny payment for those drugs or procedures that do not meet the insurance company guidelines. This denial usually results in the health care provider appealing the decision which can be labor intensive and time consuming. Providers are justifiably aggravated as it seems like gatekeepers for the insurance companies are making clinical decisions on patients they have never seen. Also, guidelines have never been deemed to be the “standard of care” as each patient has their own unique characteristics which the provider needs to understand in order to make a reasonable medical judgment.
If the payments to physicians are decreased, there will come a time that they will no longer participate as their overhead costs will exceed their remuneration. They will either refuse to see patients with certain insurance or they will retire. Either of these two options can put the Affordable Care Act in jeopardy as physicians are a critical resource in the health care model.
Can the government force the physicians to participate in the ACA? Can the government prevent the physicians from retiring? These questions will need to be litigated and will probably have to go to the Supreme Court for a definitive decision. This process will take time.
 Robert Lowes, Medscape Medical News, March 3, 2016.
by Darryl S. Weiman, M.D., J.D.
Professor, Cardiothoracic Surgery, University of Tennessee Health Science Center and Chief of Surgery, VAMC Memphis, TN
In 2010, Congress enacted the Patient Protection and Affordable Care Act (ACA). The goals of the Act were to increase the number of Americans covered by health insurance and to decrease the cost of health care. No republicans voted for the bill. Since the Act’s passage, it has come under legal attack from many fronts.
Under the Act, the States were to set up exchanges which listed the various insurance plans and the associated costs. Accessing the exchange website would allow people to shop for a plan that would best fit their needs. If a State decided that the cost of setting up the exchange was too high or for whatever other reason, then the Federal government would come in and set up its own exchange. However, under the law, only the States that had set up their own exchange would have their citizens access tax credits which could help pay for the insurance premiums.
The first controversy to make it up to the Supreme Court dealing with this Act was King v. Burwell. In this case, the Supreme Court held that tax credits would be made available to all who used the exchanges, even the exchanges which had been set up by the Federal government. In effect, the Supreme Court, in a divided opinion, saved the ACA by making insurance premiums more affordable in all of the States.
The second controversy to make it to the Supreme Court was National Federation of Independent Business v. Sebelius. This paper will look at the National Independent Business decision.
One of the key requirements under the Affordable Care Act was the individual mandate which required most Americans to obtain health insurance coverage. For people who were not exempt from this coverage and were not covered through an employer or a government program, this requirement could only be met by buying health insurance from a private company. The legal issue pertaining to this individual mandate was the power of the Congress to force the buying of health insurance by people who were not participating in this particular form of commerce.
A second important requirement of the Act was to expand Medicaid to help cover all adults with incomes up to 133 percent of the federal poverty level. The legal issue relating to this expansion was the ability of the Congress to force the states to cover several more people under Medicaid or suffer the loss of all federal funding that had previously been given for Medicaid.
The third issue addressed by the Court in this decision was the applicability of the Anti-Injunction Act if, in fact, the payment required by those who did not obtain health insurance was deemed to be a “tax” as opposed to a “penalty”.
The Individual Mandate
Shortly after President Obama signed the Affordable Care Act into law, thirteen States filed a complaint in the Federal District Court for the Northern District of Florida. Eventually, 13 more States, the National Federation of Independent Business and several individuals, joined in the suit. The main issue alleged by the plaintiffs was that the individual mandate exceeded Congress’s power under Article 1 of the United States Constitution.
The District Court agreed with the plaintiffs. This Court also held that the individual mandate could not be removed without changing the law, thus, the whole ACA had to be struck down.
The Court of Appeals for the Eleventh Circuit agreed. The majority opinion of that Court affirmed that the Commerce Clause does not give the Congress the power to force people to engage in commerce. If the Commerce Clause gave Congress that kind of power, there would be no limits on what Congress could do and that would violate precepts of Federalism.
Other Courts of Appeals came up with different opinions. The Sixth Circuit and the D.C. Circuit held that the individual mandate was a valid exercise of Congress’s power under the Commerce Clause.
The Fourth Circuit held that the individual mandate was really a tax. Since a tax was involved, they reasoned that the Anti-Injunction Act would apply which would prevent the courts from assessing the merits of the case until the tax had been collected.
When several Courts of Appeal come up with very different holdings, the Supreme Court is likely to take on the case; that is what happened here.
In the Supreme Court opinion, four of the Justices felt that Congress had the power to make the individual mandate into law. They agreed with the Sixth Circuit and the D.C. Circuit that this power was emanating from the Commerce Clause. Four other Justices said that this power was not available under the Commerce Clause because if it was, Congress could force people to buy things, i.e., engage in commerce. This would be more than regulating commerce which was on-going. As Justice Scalia wrote, “Upholding the Affordable Care Act under the Commerce Clause would give Congress the same license to regulate what people do not do…They gave Congress the power to regulate commerce, not to compel it.”
Chief Justice Roberts agreed that the power was not within the Commerce Clause, but it was within the power of the Taxing Clause. With his vote, the individual mandate was deemed constitutional and the Affordable Care Act was, once again, saved by his vote. Even though President Obama assured the American people that this was not a tax, government lawyers did raise this argument during the litigation.
Surprisingly, even though the Congress stated that this penalty must be paid to the IRS with the individual’s taxes, the Act forbade the IRS from using its usual enforcement tools, criminal prosecutions and levies, in collecting the tax. Also, the law allowed for some individuals to be exempt from the penalty even though they were subject to the mandate. This would be for those whose income was below a certain level and the Indian tribes.
The dissent gave several arguments refuting the notion that the individual mandate was a tax. Justice Scalia wrote “…to say that the Individual Mandate merely imposes a tax is not to interpret the statute but to rewrite it. Judicial tax-writing is particularly troubling. Taxes have never been popular, and in part for that reason, the Constitution requires tax increases to originate in the House of Representatives. That is to say, they must originate in the legislative body most accountable to the people, where legislators must weigh the need for the tax against the terrible price they might pay at their next election, which is never more than two years off.”
The Medicaid Expansion
When Medicaid was first enacted in 1965, it offered federal funding to the States to help pregnant women, children, needy families, the blind, the elderly, and the disabled to get medical care when needed. There were federal criteria that the States had to meet in order to get the funding and by 1982, every State was participating in this program. Federal funds for Medicaid have become a large part of every State’s budget; in fact Medicaid is now more than 10% of each States’ total revenue.
The Affordable Care Act expanded the coverage under Medicaid to include adults with incomes up to 133% of the federal poverty level. This was a big expansion of Medicaid and a large part of the costs for this expansion would be borne by the States. Under Federalism, the Congress could not force the States to expand the Medicaid coverage, but they hoped to coerce compliance by threatening the States with the loss of all federal funding for Medicaid if they did not expand the coverage as required under the ACA.
In addition to expanding the patient population eligible for Medicaid, the Affordable Care Act also required the States to increase the essential health benefits package. The Federal government agreed to pay the added costs of this expansion until 2016 at which time, they would decrease the payment gradually but not below 90% of the added costs. Still, the extra costs to the States would be substantial.
The States argued that these extra costs would be substantial even with the Federal payments and some wanted to opt out but they could not afford to give up all of the Federal subsidies they were already getting for Medicaid. The States felt that this penalty was coercive in nature and was forcing the States to do something the Federal government could not directly order them to do; again an unconstitutional act.
Justice Roberts agreed with the States on this issue. His vote along with several other justices severed this mandate from the Affordable Care Act. Since this severance was not lethal to the rest of the ACA, the rest of the Act was allowed to stand.
The Applicability of the Anti-Injunction Act
The Anti-Injunction Act is a law that forbids anyone from suing to bar the collection of a tax. With this law, taxes can only be challenged after they have been paid; the cause of action would be to sue for a refund. Since Justice John Roberts and the government felt that the individual mandate was a tax, then the argument could be made that the case was not yet ripe to be heard by the Courts.
In fact, the Fourth Circuit had ruled that the plaintiffs could not challenge the individual mandate until they had paid the penalty.
Since Justice Roberts ruled that the individual mandate was really a tax, he then had to explain why the Anti-Injunction Act did not apply. He dealt with this issue by referring to the Internal Revenue Code which draws a consistent distinction between the terms “tax” and “assessable penalty”. Although the IRS can assess taxes and penalties, the Affordable Care Act does not give the IRS the power to treat the individual mandate as a tax for which the Anti-Injunction Act would apply.
Perhaps the tax (penalty?) was not really being used to pay for debts of the United States and that is why the Anti-Injunction Act did not attach. Or if a tax is the penalty for not doing something ordered by Congress, then the Anti-Injunction Act would only attach if it was actually in the law for which the penalty was described. This part of the opinion was difficult to understand; suffice it to say that Justice Roberts held that the Anti-Injunction Act did not apply to this particular tax.
The dissent, having found that the individual mandate was not a tax to begin with, had no trouble concluding that the Anti-Injunction Act did not apply.
In summary, this Supreme Court case had three holdings:
The Individual Mandate was constitutional;
The plan to withhold all Medicaid funding from the States who refused to expand the Medicaid program and add the essential health benefits that came with it was coercive in nature and was, thus, unconstitutional;
The tax penalty that those who refused to buy health insurance had to pay was not subject to the Anti-Injunction Act.
States who refused to expand Medicaid were still allowed to get the federal funding that they were already getting with the original Medicaid program and this ruling allows the rest of the Affordable Care Act to stand.
This was the second time that Chief Justice Roberts saved the Affordable Care Act. Nancy Pelosi said we would have to pass the law before we could understand what was in it. I think she was right. The people and the Courts are still trying to sort things out and there are still sections of the law in litigation and other sections that are not yet ripe for suit; only time and resources will sort these issues out.
Now, with the recent death of Justice Scalia, it is unlikely that the Supreme Court will do much to stop the ACA from remaining the law. However, things may change if there is a republican president and control of the House and Senate remains in republican hands.
 Prisoners and undocumented aliens are exempt from the individual mandate. People with incomes below a threshold and Indian tribes, although they are subject to the individual mandate, are exempt from the penalty (tax?) if they do not purchase the insurance.
 Dissent of Antonin Scalia in National Federation of Independent Business v. Sebelius.
 Under Article 1 section 8, cl.1, Congress may “lay and collect Taxes, Duties, Imposts and Excises to pay the Debts and provide for the common Defence and general welfare of the United States.”
by Darryl S. Weiman, M.D., J.D.
Professor, Cardiothoracic Surgery, University of Tennessee Health Science Center and Chief of Surgery, VAMC Memphis, TN
Barbara Grutter, a rejected applicant of the University of Michigan Law School, brought suit claiming that the University’s consideration of race and ethnicity in its admissions process violated her rights under the Equal Protection Clause of the Fourteenth Amendment and Title VI of the Civil Rights Act of 1964.
During Grutter’s trial, there was ample evidence that showed the Law School did use race as a criteria in the decision-making process. Dennis Shields, the Director of Admissions when Grutter applied, said race was considered “to ensure that a critical mass of underrepresented minority students would be reached so as to realize the educational benefits of a diverse student body.”
Erica Munzel, the Director of Admissions after Shields, defined “critical mass” to mean “a number that encourages underrepresented minority students to participate in the classroom and not feel isolated.” Although Munzel did use the word “number,” she went on to say “there is no number, percentage, or range of numbers or percentages that constitute critical mass.” The Law School presented evidence that a diverse student body was necessary “to enhance classroom discussion and the educational experience both inside and outside the classroom.”
The United States District Court, E. D. Michigan, ruled in Grutter’s favor. The District Court held that the desire for a diverse student body was not a compelling government interest and even if it was, the policy was not narrowly tailored to further the objective since quotas were being used. The District Court found
“…it significant that the dean and the admissions director monitor the school’s ‘daily admissions reports,’ which classify applicants by race. These reports inform the reader how many students from various racial groups have applied, how many have been accepted, how many have been placed on the waiting list, and how many have paid a deposit. There would be no need for this information to be categorized by race unless it were being used to ensure that the target percentage is achieved.”
The District Court found this to be a quota system and was thus, unconstitutional.
In a brief of Amici Curiae, the Deans of several top law schools argued that a diverse student body was essential for the law schools to meet their mission of training lawyers across all fields of business, government service, etc. The brief states that, “[a] diversity of backgrounds, life experiences, and cultural perspectives in the universities’ student bodies is essential to providing both a sound legal education for students and a firm foundation for graduates to serve and to lead thereafter.”
Thomas Sowell, who writes about affirmative action, is not sure that diversity manifested by a “critical mass” of minority students is beneficial for all students. Sowell argues that “the assumption that a ‘critical mass’ is not only academically beneficial, but academically essential, has become prevailing dogma without empirical evidence being asked or given.” Sowell relies on
“[a] recent empirical study published by the National Bureau of Economic Research [that] found that ‘a higher percentage of Black schoolmates has a strong adverse effect on achievements of Blacks and, moreover, that the effects are highly concentrated in the upper half of the ability distribution.’”
Although the United States District Court for the Eastern District of Michigan ruled in favor of Grutter, the decision was reversed by the United States Court of Appeals for the Sixth Circuit, which held that “…the Law School has a compelling interest in achieving a diverse student body.” The Court of Appeals also held that the “Law School’s use of race was narrowly tailored because race was merely a “potential ‘plus’ factor” and because the Law School’s program was “virtually identical” to the Harvard admissions program described approvingly by Justice Powell” in the Bakke decision.
In coming to its decision, the Sixth Circuit returned to Regents of the University of California v. Bakke, 438 U.S. 265 (1978) and concluded that the University of Michigan’s use of race in its decision making process did not constitute a quota and was constitutional.
Critics still claimed that “critical mass” was just a euphemism for quota and as such, was being used as more than just one criterion to attain a diverse student body. The Supreme Court granted certiorari.
In a 5 to 4 decision, the Supreme Court agreed with the Sixth Circuit. On June 23, 2003, the Court upheld the University of Michigan law school’s program because it only considered race as a plus which could be used by the admissions committee in striving to attain the “critical mass” of minorities needed to enhance the educational environment of the law school. This decision reaffirmed Bakke.
In the majority opinion, written by Justice O’Connor, the Court deferred to the judgment of the Law School’s admission committee that diversity was needed for the school to better meet its educational mission. “Attaining a diverse student body is at the
Heart of the Law School’s proper institutional mission, and its ‘good faith’ is ‘presumed’ absent ‘a showing to the contrary.’”
In a dissenting opinion, Justice Scalia argued that the compelling state interest was no more than the University’s desire to have an elite law school. Justice Scalia pointed out that the school could easily attain class diversity by lowering its admissions requirements so that more minorities would be eligible for admission. Justice Thomas agreed with Scalia. In his opinion, Thomas wrote, “I believe blacks can achieve in every avenue of American life without meddling of university administrators.”
Although lacking any solid evidence that diversity was needed for the school to meet its mission of training lawyers, the Court concluded that diversity should be considered a compelling State interest – at least in the Law School class. This part of the decision has led to some criticism other than from the dissenting Justices. As Alan Dershowitz writes:
[The Court] once again seemingly concerned itself far more with the description of the program than its actual application. The Court began by clearing up a central ambiguity of Bakke, with at least five justices clearly holding that diversity could serve as a compelling state interest for affirmative action programs.
The original criticism that a “critical mass” was just another descriptive term for “quota” was not clarified in Justice O’Connor’s majority opinion. However, it appears that so long as a number is not used in describing what constitutes a “critical mass”, the use of race in the decision-making process will pass constitutional muster. As Dershowitz concludes,
“The Court’s 2003 amplification of the Bakke principle in the Michigan case did little to clarify the underlying rationale for taking race into account as a means toward eventually achieving a “color-blind” society. Nor did it satisfy critics who believe that diversity is a euphemism for “quotas,” or at least for “floors” for some groups (which, of course, become “ceilings” for others). The most that can be said for th[is] decision is that [it offers] a pragmatic solution to a difficult racial problem that may have no perfect theoretical solution.”
The Michigan program did not have a two track system with numerical quotas for minorities. Also, the Michigan system used race as just one of many criteria, similar to the Harvard plan which had already been found to not be offensive to the Equal Protection clause of the Fourteenth Amendment. The decision of the Court is thus consistent with its dicta and holding in the Bakke case. Justice O’Connor did provide a warning that she expected the use of “race” as a criteria for attaining a “critical mass” of minority students in graduate schools to be short-lived. As she wrote in her majority opinion,
“Finally, race-conscious admissions policies must be limited in time. The Court takes the Law School at its word that it would like nothing better than to find a race-neutral admissions formula and will terminate its use of racial preferences as soon as practicable. The Court expects that 25 years from now, the use of racial preferences will no longer be necessary to further the interest approved today.”
Justice Thomas believes that the 25 year time limit is not justified. He writes, “while I agree that in 25 years the practices of the law school will be illegal, they are, for the reasons that I have given, illegal now.”
With this decision, affirmative action will be allowed in graduate school admissions decisions, at least for the near future. The decision making process, however, will not be easy. In an Associated Press report, Justin Pope points out that “[a]ffirmative action remains legally risky.” Admissions committees will be watched by opponents of affirmative action to see if any digital representation is used to describe the quest for a diverse class. “In the last year, the threat of  suits has persuaded a number of schools to cancel or open up summer, orientation and scholarship programs that had explicitly targeted minorities.”
Proponents of affirmative action, although relishing the reaffirmation of Bakke, know that there are issues that still need to be addressed. The NAACP is concerned that the Michigan ruling may not go far enough.
“Shaw, of the NAACP, says he is comforted by what he feels is a broad and deep commitment among educators to diversity, and an overall willingness to spend money on the hard work of doing it legally…[b]ut he remains worried about the legal uncertainty concerning how the Michigan ruling, which addressed only admissions, applies to scholarships for minorities. And he notes continued skirmishing on the state level. “We’re much better than we would have been had we lost,” Shaw said. “But it’s one battle, and the war goes on.””
The Grutter decision of 2003 reaffirms the Bakke decision of 1979. Because the decision was close and the dissent was rigorous, the debates as to the constitutionality of affirmative action in regards to graduate school admissions continued. Until there is further clarification, race can be used as one criterion of many in making admissions decisions for college and graduate school. The Court was specifically dealing with medical and law schools in the decisions, but there is nothing in either opinion to rule out other graduate school programs from using the same criteria. Until we hear otherwise, affirmative action in college and graduate school admissions decisions will pass constitutional muster so long as no digital representation of either a number or a percentage is used to describe the “critical mass” necessary to realize racial diversity in the matriculating class.
Since the Grutter decision, four new justices have been added to the Supreme Court. Chief Justice John Roberts and Justice Samuel Alito were nominated by George W. Bush while Justices Sonia Sotomayor and Elena Kagan were nominated by President Obama. It can be predicted that these new justices are likely to split on the issue of affirmative action as it applies to graduate admissions; however, predictions are often wrong.
Even with Grutter, the lower courts have been struggling with this contentious issue. Since there is confusion, the Supreme Court has decided to listen to arguments and then, hopefully, clarify the issue of affirmative action; at least address its applicability to college and graduate school admissions. In Fisher v. University of Texas, arguments were heard on December 10, 2015. A decision on the Fisher case is expected this spring.
Actually, this will be the second time the Supreme Court will weigh in on Fisher. Originally, the U.S. Court of Appeals for the Fifth Circuit ruled that the University of Texas could use race as a factor in deciding college admissions. They agreed with the trial court which gave the University a summary judgment. The Supreme Court did not address the constitutionality of using race; instead they sent the case back because the lower courts did not use “strict scrutiny” in evaluating the University of Texas admissions program.
When the Fifth Circuit again agreed with the lower court that the use of race was constitutional, the Supreme Court decided to re-hear arguments. It looked like the Court was ready to do away with affirmative action as to college and graduate school admissions. But now Justice Scalia has died and it appears that the Court is headed to a four to four split. With a split, the Fifth Circuit decision will hold; but only the courts in the Fifth Circuit will be bound to that decision.
 In constitutional law, the standard applied to suspect classifications (such as race) in equal-protection analysis and to fundamental rights (such as voting rights) in due-process analysis. Black’s Law Dictionary. Under strict scrutiny, the state must establish it has a compelling interest that justifies the law in question. Black’s Law Dictionary.
by Darryl S. Weiman, M.D., J.D.
Professor, Cardiothoracic Surgery, University of Tennessee Health Science Center and Chief of Surgery, VAMC Memphis, TN
Affirmative action in medical school and law school admissions decisions was deemed to be constitutional in the University of California v. Bakke and Grutter v. Bollinger Supreme Court decisions. However, there was a time limit mentioned in the Grutter decision.
With four new justices affirmed to the Supreme Court since Grutter, the time is ripe for a new look at the constitutionality of affirmative action in graduate and even undergraduate school admissions decisions.
In fact, the Supreme Court heard oral arguments in Fisher v. University of Texas on December 10, 2015 where affirmative action was once again the center of controversy.
A review of the jurisprudence of affirmative action on college and graduate admissions is timely and is especially pertinent to those of us who work in undergraduate and graduate medical education. In this article, we will review the Bakke case.
The history of affirmative action in graduate and undergraduate school admissions has been characterized by heated debate. Proponents of affirmative action argue that it is necessary to ensure a diverse class make up which is essential in furthering the educational mission of colleges and graduate schools. Proponents also claim that affirmative action is necessary to overcome past practices which have discriminated against certain groups and kept them from realizing the benefits of a college or graduate school education.
The critics of affirmative action claim the policy is nothing more than reverse discrimination, which, in turn, punishes applicants who are not a member of the targeted groups. Critics also claim the policy of affirmative action violates the equal protection clauses of the Constitution and thus, is illegal.
In 1978, the Supreme Court addressed the issue of affirmative action in graduate school admissions in University of California Regents v. Bakke.
The Bakke Case
In 1973, Allan Bakke, a white male, applied to the medical school of the University of California at Davis (UC Davis). Despite being a strong candidate, he was rejected. Bakke’s rating of 468 out of 500 on the UC Davis rating system was just below the 470 score needed for admission at the time his application was complete. However, at the time he was rejected, there were still four slots available in a special admissions program, which were available to minorities as a racial and ethnic quota. After his rejection, Bakke wrote a letter to Dr. George Lowrey, Associate Dean and Chairman of the Admissions Committee, claiming “…the special admissions program operated as a racial and ethnic quota.”
When Bakke reapplied to Davis in 1974, his faculty interview by a quirk of fate was with Dr. Lowrey who found Bakke to be “rather limited in his approach” to the problems of the medical profession and found disturbing Bakke’s “very definite opinions which were based more on his personal viewpoints than upon a study of the total problem.” Dr. Lowrey rated Bakke at a lower level and, as a result, Bakke was again rejected for admission by the school.
“In both years, applicants were admitted under the special program with grade point averages, MCAT scores, and benchmark scores significantly lower than Bakke’s.” For example, in 1973, Bakke’s grade point average was 3.51 with MCAT scores of 96 (verbal), 94 (quantitative), 97 (science), and 72 (general information). This was compared to special admittees of 2.62, 46, 24, 35, and 33. In 1974, the special admittees GPA and scores were 2.42, 34, 30, 37, and 18.
After his 1974 rejection, Bakke filed a lawsuit in the Superior Court of California alleging that the special admissions program of the Medical School caused him to be rejected on the basis of his race. Bakke claimed that his rights were violated under the Equal Protection Clause of the Fourteenth Amendment. Bakke also claimed his rights were violated under the California Constitution (Art. I, 21) and 601 of Title VI of the Civil Rights Act of 1964, but for the purposes of this paper, the first claim is dispositive.
The trial court held that the special admissions program violated the Federal Constitution based on the finding that the special program was functioning as a racial quota whereby minority applicants were being rated only against each other and there were 16 spaces in the medical school class being reserved only for them. However, the court denied Bakke’s request for an injunction to compel his admission to the school holding “…that he had failed to carry his burden of proving that he would have been admitted but for the existence of the special program.”
Because he had been denied admission to the school, Bakke appealed.
UC Davis appealed from (1) the decision that its special affirmative action program was unlawful and (2) from the order preventing the school from using race in making its admission decisions. The Supreme Court of California took the case directly from the trial court “because of the importance of the issues involved.”
The California Supreme Court ruled that the Equal Protection Clause of the Fourteenth Amendment had been violated holding that “no applicant may be rejected because of his race, in favor of another who is less qualified, as measured by standards applied without regard to race.” This court also held that since Bakke had shown that the school had discriminated against him because of his race, the burden of proof was on the school to show that he would have not been admitted even if there were no special admissions program. Since the school conceded that it could not prove this issue, the California court directed the trial court to order Bakke’s admission to the Medical School. The United States Supreme Court granted certiorari.
In an opinion authored by Mr. Justice Powell, the Court held that: (1) the special admissions program of UC Davis was unconstitutional, but (2) race may be used as one of several factors by which a school can make decisions on admissions, and (3) affirmed the decision to allow Bakke to be admitted to the school.
According to the Court, the fatal flaw of the UC Davis special admissions program was the quota of 16 slots reserved for the minority students, which resulted in a violation of individual rights of those applicants who would not be allowed to compete for those slots based solely on their race. In its decision, the Court made clear that race could be used in a properly devised admissions program since racial diversity in the school’s case was a substantial state interest which would be legitimately served by taking race into account in the admissions process.
During arguments, UC Davis had four reasons to justify the special admissions program. These were (1) “[to reduce] the historic deficit of traditionally disfavored minorities in medical schools and in the medical profession;” (2) countering the effects of societal discrimination; (3) increasing the number of physicians who will practice in communities currently underserved; and (4) obtaining the educational benefits that flow from an ethnically diverse student body.
As far as the Supreme Court was concerned, the first justification immediately failed. “Preferring members of any one group for no reason other than race or ethnic origin is discrimination for its own sake. This the Constitution forbids.”
Historically, any system designed to favor any particular group at the expense of others who were innocent of any perceived victimization of the favored group required certain findings. The Court made clear that UC Davis was in no position to make such findings. Justice Powell stated:
We have never approved a classification that aids persons perceived as members of relatively victimized groups at the expense of other innocent individuals in the absence of judicial, legislative, or administrative findings of constitutional or statutory violations.
Only after such findings would the State’s interest be substantial enough to justify preferential treatment of the injured parties at the expense of so called innocent parties. Also, the remedy chosen would have to be one which works the least possible harm to those who were now being discriminated against. The role of UC Davis was in education of medical students, not in correcting perceived societal wrongs.
The Court, however, did concede that attainment of ethnic diversity in the student body was a constitutionally permissible goal for an institution of higher learning. “Academic freedom, though not a specifically enumerated constitutional right, long has been viewed as a special concern of the First Amendment. The freedom of a university to make its own judgments as to education includes the selection of its student body.”
The Court felt that genuine diversity would not be attained with the UC Davis program which looked only at race and ethnicity. As an example of an admissions program which was tailored for diversity that would meet constitutional muster, the Court cited the Harvard College program.
“[At Harvard, w]hen the Committee on Admissions reviews the large middle group of applicants who are “admissible” and deemed capable of doing good work in their courses, the race of an applicant may tip the balance in his favor just as geographic origin or a life spent on a farm may tip the balance in other candidates’ cases. A farm boy from Idaho can bring something to Harvard College that a Bostonian cannot offer. Similarly, a black student can usually bring something that a white person cannot offer. [The] awareness [of the necessity of including more than a token number of black students] does not mean that the Committee sets a minimum number of blacks or of people from west of the Mississippi who are to be admitted…
According to the Court, this system allows race to be used as a factor in the decision making process since it is not the sole criterion in deciding who will get that admissions slot. There would be no unequal treatment under the Fourteenth Amendment with this system. As Justice Powell noted in his opinion,
“[A] great deal of learning occurs informally. It occurs through interactions among students of both sexes; of different races, religions, and backgrounds who come from cities and rural areas, from various states and countries; who have a wide variety of interests, talents, and perspectives; and who are able, directly or indirectly, to learn from their differences and to stimulate one another to reexamine even their most deeply held assumptions about themselves and their world.”
The Bakke decision has been the law since 1978. It is interesting to note what Supreme Court Justices have said about Bakke in subsequent decisions and writings. In a commentary, current Supreme Court Justice Scalia said “Justice Powell’s opinion [is] ‘the law of the land.’” 1979 Wash. U.L.Q. 147,148 (1979). Justice Stevens concurred in an opinion written by Justice Brennan, which cited Bakke whereby “a diverse student body contributing to a ‘robust exchange of ideas’ is a ‘constitutionally permissible goal’ on which race-conscious university admissions programs may be predicated.” Metro Broadcasting, Inc. v. FCC, 497 U.S. 547, 568 (1990).
Justice O’Connor in Johnson v. Transp. Agency, 480 E.S. 616, 656 (1987) concurring “approv[ed] gender-conscious promotion where defendant ‘tried to look at the whole picture, the combination of [her] qualifications and [plaintiff’s] qualifications, their test scores, their experience, their background, [and] affirmative action matters.”
Over the next 20 years, debate continued. Since the Fourteenth Amendment was involved, strict scrutiny needed to be applied if it was to be ignored. Was diversity of the student body a compelling enough State interest to allow a narrowly tailored race-based action whereby an individual’s race could be used to decide whether or not he would be admitted to graduate school? Was Justice Powell’s decision just dictum, or was it to be the law of the land?
In subsequent decisions, disagreement occurred as to whether or not diversity of the student body was truly a compelling state interest. In Hopwood v. Texas,  the Court of Appeals held that diversity of the student body is not a compelling state interest. The Hopwood Court concluded “that any consideration of race or ethnicity by the law school for the purpose of achieving a diverse student body is not a compelling interest under the Fourteenth Amendment. Justice Powell’s argument in Bakke garnered only his own vote and has never represented the view of a majority of the Court in Bakke or any other case.”
Within the general principles of the Fourteenth Amendment, the use of race in admissions for diversity in higher education contradicts, rather than furthers, the aims of equal protection. Diversity fosters, rather than minimizes, the use of race. It treats minorities as a group, rather than individuals. It may further remedial purposes but, just as likely, may promote improper racial stereotypes, thus fueling racial hostility.
However, in Smith v. University of Washington Law School,the Court of Appeals held that diversity was a compelling State interest. The Smith Court held that “the Fourteenth Amendment permits University admissions programs which consider race for other than remedial purposes, and educational diversity is a compelling governmental interest that meets the demands of strict scrutiny of race-conscious measures.”
Interestingly, before the Smith Court made its decision, the Washington State legislature passed Initiative Measure 200 which stated, “[t]he state shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting.”
With the passage of this new legislation, the Law School voluntarily changed its admissions policy so that race was no longer a considered factor.
Since there was disagreement among appellate courts on this important question, the Supreme Court decided to better resolve the issues in the case of Barbara Grutter.
In my next article, the Grutter case will be discussed.
University of California v. Bakke, 438 U.S. 265 (1978).
 Section 1 of the Fourteenth Amendment states “. . . No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
 There was a total of 100 slots for the first year class. Sixteen slots were reserved for minority students in the special admissions program although minority students were also allowed to compete for the other 84 slots. The non-minority students were limited to competing for only the 84 slots.
 In this regard, UC Davis’ selection of Negroes, Mexican-Americans, American Indians and Asians as the groups eligible for its special admissions program was difficult to justify especially in light of the fact that many Asians were eligible for admission under the regular admissions process. Id.
Id. at Justice Powell quoting from Professor Gurin, President of Princeton University
Korematsu v. United States, 323 U.S. 214 (1944). In Korematsu, pressing public necessity was the standard used to justify racial discrimination. This was the first case to purport that strict scrutiny would be the standard used to justify any governmental discrimination based on race. Id.
One of the goals of the Affordable Care Act, otherwise known as “Obamacare”, is to decrease the cost of health care. It is believed that some of these costs are related to medical malpractice; these costs are driven by high malpractice insurance premiums that health care providers must buy and the unnecessary tests and procedures that are done in a “defensive” manner to better help in defending a future, potential, negligence claim.
Recognizing these costs, the Affordable Care Act allows for the award of five-year demonstration grants which will be awarded to the States to set up new methods of medical malpractice resolution. The plans should be designed to cut the costs associated with the current medical malpractice tort litigation and hopefully, allow the providers to stop practicing “defensive medicine.” These grants were to be appropriated starting in fiscal year 2011. To my knowledge, this has not yet occurred.
America’s current system of dealing with the tort of medical malpractice is woefully inefficient and costly. Juries often find it difficult in differentiating victims of malpractice from those who have suffered from an unavoidable outcome and the jury may fail in reaching reasonable awards for those who are injured.
Only two percent of patients injured by negligent care in a hospital ever file a malpractice claim (New England Journal of Medicine vol. 324, 1991 (370-6). The elderly and the poor are even less likely to sue (Medical Error: What do we know? What do we do? Jossey-Bass, 2002). For providers, going to trial can be a risky endeavor as you never know what a jury will do.
In Tennessee, for example, heart surgeons are sued for malpractice on the average of once every three years. One case where I was a named defendant occurred in 1996. The case finally went to trial with a defendant verdict in 2013. In this case, the first judge died and a second judge recused herself since she knew one of the defendants. So much for the concept of a speedy trial as a Constitutional right.
Because of the noted shortcomings of the present system, there have been proposals in the United States Congress, both in the House and Senate, to allocate money to the States to experiment with “Health Courts” and other alternatives to the present system of litigation, for resolving medical malpractice suits. These courts did not get any traction in the past but they are now being restudied under the goals of the Affordable Care Act.
The proposed Health Court system will probably have a liberalized standard for negligence; a mistake or medical treatment falling outside a range of good practice will be compensable. The plaintiff will no longer have the burden of persuasion to show personal fault on the part of the defendant.
The Health Courts will be designed to expedite proceedings and improve patient access to the system. There will probably be limits on non-economic damages which will be based on the severity of injury. Damages will be set by an independent commission created by the State.
Under current models, the Health Courts will have public reporting of all cases settled or adjudicated. This would be a means for setting precedent for other courts dealing with similar fact patterns. There may even be a centralized reporting system so that there could be a uniformity of awards among all of the states.
What about the constitutional right to a jury trial? The Seventh Amendment states in part, “[i]n Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved…” The U.S. Constitution does not prohibit Congress or the States from creating new compensation rights or eliminating claims that were recognized by common law so long as any changes were part of a comprehensive administrative scheme that provides benefits for the claimant. New York Central Railroad v. White 243 U.S. 188, 200 (1917).
Based on the previous model formed by the Congress, the Health Court system would probably require an initial review of the claim by a Health Court Review Board. If the Board concludes that the injury was clearly due to malpractice, a payment would be made based on a published schedule of benefits. These claims would have expedited payments since they would fit the definition of an Accelerated Compensation Event (ACE). Examples of an ACE would be giving a drug to a patient who is known to be allergic to the drug, amputating or otherwise operating on the wrong extremity, or unintentionally leaving a foreign body inside a patient who has been operated on.
If the Board is certain that the claim was not due to malpractice or the injury was too small to justify an award, they can dismiss the suit.
For cases that are not clear, a Health Court trial would be the next step in the process. These trials, based on previous models, would be presided over by “specially qualified judges” with a background in science or medicine. The models previously discussed do not require the judge to have any legal training but this may change during administrative clarifications.
I am not sure how the judges would be picked for this system, but there was a plan put forth previously by the Progressive Policy Institute which would have the judges appointed by the governors of the States. These judges would have to have a background in science and/or medicine. It was not defined how much science (hard or social) would be required or how much medical knowledge. It was also not clear if the judge would need to be a medical doctor. Would nurses and PhD’s be allowed?
The Health Courts would have power to hire their own experts to help explain the issues relating to standards of care and causation. Lawyers could be present during the proceedings but there would be no juries
The hired expert witnesses would be tasked to help the judges make binding determinations as to standards of care, causation, compensation, and related issues such as comparative fault. The expert would be considered as neutral as to the case outcome.
It is foreseeable that there will be a new legal standard as to what constitutes an injury. An “injury” will be the result of a mistake that should have been prevented. An injury would not occur if “optimal” care had been given. This is known as the “avoidability standard”. This standard is more liberal than negligence but not as severe as the “no fault” standard. Plaintiff will no longer need to prove that the defendant breached the standard of care by acting negligently. He will only need to prove that optimal care was not given; a much easier standard to prove.
If liability is found, damages would need to be set. In the previous models, the damages were to be set by a schedule of benefits derived from a consensus process involving research into similar benefit schedules in the United States and abroad. The schedule would cover both economic and non-economic damages.
Non-economic damages would be listed in a tiered system based on severity of injury. The damage schedule would be adjusted annually on the federal level and then used by the state health courts. The overall goal of the system will be to reduce health costs by reducing liability payments and the malpractice costs of providers.
The benefits of the proposed Health Court system would be (1) quicker and more reliable justice; (2) improved patient safety; (3) lower overall costs; (4) allow for the patient to have a more trusting and open relationship with physicians and other health care providers; and (5) a liberalized compensation scheme to cover avoidable injuries without the requirement of proving negligence. (Bulletin of the American College of Surgeons, May 2006).
The Health Court system seems like a reasonable idea to bring more fairness to compensating patients who have been injured by health care providers. Physicians like the system; insurance companies like it; Republicans like it; the Institute of Medicine likes it.
Lawyers hate it! In fact, the American Bar Association (ABA) adopted a resolution opposing the creation of Health Courts in 2006. The resolution stated that the ABA has “a strong history of firmly supporting the integrity of the jury system, the independence of the judiciary and the right of consumers to receive full compensation for their injuries, without arbitrary caps on damages.”
It is not clear what the role of the National Practitioner Data Bank will be, especially as it relates to payments not due to medical malpractice.
I am not very good at predicting the future, but I know that physicians will need to understand what is going on in the medical malpractice arena so they can better participate in the decision making process. It will be interesting to learn what the states will do with this grant money being provided under the Affordable Care Act.
 Janice Mulligan, Chair of Standing Committee on Medical Professional Liability, 2006.
One of the linchpins of the Affordable Care Act (ACA) was to have health care insurance available for everyone. States were to form health care exchanges whereby people could shop for a suitable health care policy that fit their needs and still meet the requirements of the Act. If a state were to opt out of making an exchange, the Federal government would have a fall back exchange which could be used instead. The Federal government could not force the states to set up exchanges because that would violate rules of Federalism and the separation of powers.
In an effort to have the state’s set up the exchanges, the Act, in its original form, would only allow premium subsidies for those people who bought their health insurance on a state exchange. Surprisingly, only 17 states set up an exchange and 7 states developed a partnership exchange with the federal government; the other states opted to use the Federal exchange. The Federal government preferred the states to set up their own exchanges because the requirements of health insurance were under the powers relegated to the states. Each state would be in the best position to decide which policies would meet that particular state’s requirements.
Obamacare became a heated political issue and it was finally passed by Congress in 2010 with no votes from the republican side. President Obama signed it into law.
Kentucky was one of the states that set up its own exchange. After the passage of Obamacare, Matt Bevin, the republican candidate for governor of Kentucky was able to win relying on a platform to do away with the ACA.
It is no surprise that Governor Bevin decided to close the Kentucky state run health care exchange “Kynect.” This exchange had originally been formed under the leadership of Steve Beshear, a democratic governor.
Governor Bevin felt that Kynect was wasteful spending since the Federal exchange could be used with relatively low costs to the state. With the recent Supreme Court decision of King v. Burwell, there would really be no penalty to Kentuckians who would still be eligible for premium support from the federal government. After all, Burwell held that state and federal health insurance exchanges were the same as far as health insurance premium support was concerned.
With the closure of this exchange, about 100,000 Kentuckians with private health insurance will now need to reapply for insurance through the Federal insurance exchange. This application can be long and difficult. There are more plans to choose from and the premiums vary considerably. Some people may opt out of getting health insurance altogether. They may have to pay a penalty (a tax) by being without insurance, but this tax will likely be less than the premium costs, anyway. Also, insurance can be bought at any time (guaranteed issue) and there is no penalty for waiting until you get sick (community rating).
It is likely that many of the 100,000 will hold off on redoing their health insurance until they need it. If relatively healthy people opt out of buying health insurance, this will put pressure on the insurance companies who rely on healthy patients to pay premiums and then don’t use the policy since they are in good shape. If insurance companies start to lose money, they may opt out of participating in the health insurance business of that state.
Here is some historical perspective. Kentucky was one of the first states to implement guaranteed issue and community rating in the 1990’s. Premiums kept rising as the insurance companies tried to stay solvent. Between 1994 and 1997, forty-five insurance companies left Kentucky because of rising losses.
Several health insurers have been struggling under the Affordable Care Act. The nation’s largest health insurer, UnitedHealth Group warned that they may have to pull out of the exchanges by the end of 2016. Tenet Healthcare, HCA Holding, Aetna, and Anthem are also struggling.
There are several issues that will need to be addressed if Kentucky does close the state exchange. The state will first need to meet the obligations of the exchange through the end of 2016. Insurance companies who have participated thru the state exchange will then need to transition to the Federal exchange. Will these companies be willing to meet the requirements of the Federal exchange if they are significantly different from the requirements of the state? If the insurers are losing money, they are unlikely to stay in the business.
Is this closure of the state exchange just political posturing on the part of the republican governor who is trying to fulfill political promises? After all, there will be significant costs to the state and potentially to the citizens caught up in the transition.
The state will have to pay a 3% fee on insurance costs for the residents who use the Federal exchange. The state will also be at risk of losing $58 million of the federal grants it received for setting up the original state exchange.
Kentucky will still have to manage Medicaid and the Children’s Health Insurance Program (CHIP). These programs had originally been tied in to the state private insurance exchange; this uncoupling will likely result in some administrative costs to the state. Will the Feds cut back on the support of Medicaid and CHIP that they presently send to the state as a means to penalize the state for abandoning the state exchange?
Bevin’s approach to Medicaid will be different with the new system. Bevin says the state will still cover those whose income is up to 138% of the poverty level but there will likely be a decrease in benefits for those at or below the poverty line who do not pay Medicaid premiums. Bevin wants to model the Kentucky program after the Indiana program where people who do pay Medicaid premiums will get a better benefits package. It is uncertain as to how this will play out with the electorate.
There are some unknown unknowns that Bevin may have to deal with. Since King v. Burwellshowed that the Internal Revenue Service (IRS) controls the premium support available to the citizens, can the IRS financially punish the citizens of Kentucky to such a degree that Mr. Bevin will be forced to abandon his plans? I would not be surprised if pressure is brought to bear and Mr. Bevin may be forced to back off. I don’t think any significant changes to Obamacare will occur until there is a new President and I don’t think the present executive will sit idly by while there is an attempt to close the Kentucky exchange.
 Conrad F. Meier, “Destroying Insurance Markets: How Guaranteed Issue and Community Rating Destroyed the Individual Health Insurance Market in Eight States,” The Council for Affordable Health Insurance and the Heartland Institute, 2005; http://www.cahi.org/cahi_contents/resources/pdf/
 Nathan Bomey and Jayne O’Donnell, USA Today, November 20, 2015.
In the United States, Medicare pays the salary and fringe benefits of interns and residents in teaching hospitals. This amounts to about $100 thousand per resident every year. Of this amount, the resident is paid about $40-$50 thousand per year in salary.
Some of the dollars from Medicare are paid to physicians in charge of training the residents. In addition, several billion dollars is paid to teaching hospitals every year to offset the added costs of training residents. These costs include malpractice coverage for the residents and the added costs generated by inexperienced physicians who have a tendency, it is believed, to order more tests and consults on their patients than are really necessary. These tests and consults are for “learning purposes.”
In the late 80’s, the Inspector General and the General Accounting Office decided to do an audit as to how this money was spent. This audit found that some of the money was spent on alcoholic beverages, trips to European countries, and fine works of art. Believing that this spending was not related to resident education or training, Congressional hearings were convened.
At the initial hearings, the teaching hospitals argued that Medicare policy on how the money could be spent was unclear. Although Congress agreed that the policies were vague, they also believed that spending on art, alcohol, and trips were clearly not related to the intent of the spending. As a result of these hearings, the initial Physicians at Teaching Hospitals (PATH) audits were done. These audits were intended to “make sure that the Federal Government is getting its money’s worth and that there is honesty in what is being done.”
Historically, the charting on a patient was done by the residents. The attending physician would make rounds where the residents and medical students would present the patient, go over the latest clinical course, including lab values, EKG’s, and radiographs and results of other tests. A discussion would follow and a plan would be made. The history, physical exam, and daily notes were the responsibility of the resident.
For operations and other procedures, the resident who did the procedure or even small parts of a procedure, was expected to do the pre-operative note and the post-operative note and the dictated operative report which was a detailed description of what was done during the procedure including the operation performed, the operative findings, blood loss, specimens obtained, drains placed, and complications.
The documentation done by an attending was variable. Some attendings would do their own notes, some would just cosign the resident notes and some would do nothing. The television show House, starring Hugh Laurie, is a good depiction of attending involvement. House would go over the patient with the residents and he would do procedures on the patients, but he never made a note in the chart.
When I was a Surgical Resident in the late 70’s and early 80’s, night work was in the realm of the residents; including any operations that needed to be done. However, before anything was done to the patient (except for dire emergencies), the attending would be notified. He would then usually give the “go ahead”. At least the attending would be aware of what was going on. Sometimes (rarely) the attending would come in to the hospital but this usually meant that he did not trust the particular resident who had the on-call responsibilities at that time.
The only Medicare requirement for payment was to have some documentation of attending involvement. This documentation was usually met with some co-signatures in various parts of the chart. These co-signatures did not have to be dated and timed although they could be. Often, these co-signatures were placed at the time the patient was being discharged.
The PATH audits turned everything on its head. The Office of the Inspector General found that the University of Pennsylvania had significant errors in their billings. A percentage of billing errors was determined based on a sampling of medical records reviewed. This led to a referral to the Department of Justice (DOJ). The DOJ process used to estimate billing error used the OIG percentage of error results and used that percentage to estimate the potential False Claims for all Medicare part B services for multiple years. By using this methodology, the DOJ was able to claim a fine in the $100’s of millions range. Each violation (false claim) could have led to a fine of over $10 thousand. Since there were thousands of bills and using the percentage of error found in the OIG audit, the DOJ could put the University of Pennsylvania at grave financial risk if the Court were to rule with the government.
Because of the huge financial risk of litigating the claim, the University of Pennsylvania decided to settle with the Department of Justice for $30 million.
A similar audit at the University of Washington resulted in a $35 million settlement. I think the penalty may have been a little higher since one of the neurosurgery attendings tried to suborn perjury by having his residents say he was present in the operating room when he actually was not.
An audit of Dartmouth was initiated even though the OIG had no prior indication that the University was not properly billing. Dartmouth mounted a vigorous defense. The audit lasted for ten months and, according to Dartmouth, cost the institution $1.7 million in direct and indirect costs. When the audit was completed, the identified billing errors totaled $778. Dartmouth was vindicated but it still cost them a significant amount of money in the defense.
The OIG was making a lot of money and every University and Hospital with a training program was on the radar. A lobbying effort led to Congress shutting down the OIG but the chance of the audits starting up again remained.
The Affordable Care Act was passed by Congress and signed by President Obama in 2010. Many parts of the Act have been postponed by a stroke of the President’s pen; other parts have yet to be clarified by the Administrative bodies that have been empowered to enforce various sections of the Act.
One thing is clear. A major focus of the Act is to decrease the cost of Health Care in our country. A major mechanism of decreasing the costs is to eliminate waste, fraud, and abuse. It is likely that physicians will be closely watched to see that they are providing the services that they are billing for. Physicians at Teaching Hospitals will, once again, be scrutinized to be sure that they abide by the supervision requirements laid out by CMS and other third party payers.
At this point in time, the physician educator must document with specificity that he has seen and examined the patient. The documentation must include a pertinent history and physical exam and a plan of action to address the medical problem(s).
For physicians who are billing for a surgical or other type of procedure, there must be documentation that the attending physician was present for the critical portions of the procedure. In the past, a statement verifying that you were there for the critical portions of the procedure would have been sufficient for billing purposes. The physician could use his own judgment as to what a critical portion of the procedure was. I predict that the requirements will be tightened in the future. “Critical portions” are likely to be defined as the beginning of the operation (skin incision) and those other parts necessary to accomplish the operation successfully; this may now even include the closure of the incision.
I do not think that the teaching physicians will be required to do the critical portions of the operation themselves, but they will be required to be present in the room. This can be problematic from a resident training standpoint. If the residents in training are not allowed to do the critical steps of the operation themselves, then how will we know that they can do these steps when they, themselves, become an attending? It is a strong public interest to train physicians for the future. Will there be any wiggle room as to how much “presence” is necessary to allow for billing?
For now, a surgeon needs to be either (1) scrubbed and doing the procedure himself, or (2) scrubbed and first assisting the resident, or (3) not scrubbed, but in the room supervising the resident, or (4) not scrubbed, but available for immediate consultation. This last requirement usually required the attending to be, at least, in the hospital.
The time frame of the presence requirements has never been defined but I would not be surprised if the enforcers try to make it from beginning of the procedure until the end of the procedure. If they do this, it will mean that attending surgeons will need to be spending more time doing procedures and less time in the wards, seeing consults in the clinic, and meeting administrative responsibilities. Of course their research and teaching time will also be affected. This will mean that physicians will need to work more hours per day and/or that more physicians or physician extenders will need to be hired.
A more significant consequence of this more onerous presence requirement will be that future physicians will never have the opportunity to operate independently until they become an attending. Since all of the Surgical boards require a statement from the teachers that a particular resident can function “safely” and “independently,” it is obvious that a conflict is looming as to how best to train future physicians who do procedures, e.g., surgeons. If the law says that attendings must be present from the beginning to the end of a procedure, then there will be no opportunity for the resident to ever work without the attending looking over his shoulder.
While it is true that simulators are being developed to help surgical residents develop the skill sets needed to operate safely, they are not yet to the level of actually operating on a real live human.
It is clear to me that an unforeseen consequence of the Affordable Care Act is the reduction of the skill sets and confidence that the surgeons (and other physicians) in training need in order to operate in a safe and independent fashion. Future generations of patients will suffer as the best training methods in the world are being impaired by regulations mandated by non-clinician beaurocrats. As the older surgeons retire and/or die out, the replacements will just not be as good! What a shame.
Care will be cheaper, but it won’t be as good. I never thought that the American public would put up with this nonsense but I may be wrong.
With all of the new requirements for practicing medicine under the Affordable Care Act (Obamacare), retirement for those who can do it looks like a pretty reasonable option. Unfortunately, there is a clause under the Act that may take this option off of the table. Section 5210 Establishing a Ready Reserve Corps, amends Section 203 of the Public Health Service Act (42 U.S.C. 204) such that there will now be a Ready Reserve Corps for service in time of national emergency.
Physicians have always been subject to a draft during times of war. This new law now makes them subject to a draft during any national emergency. It is not clear under the law as to what would constitute a “national emergency,” but Section 203(c)(2)(D) states that the Ready Reserve Corps “be available for service assignment in isolated, hardship, and medically underserved communities …to improve access to health services.”
Physicians are the “ready reserve corps”. Not much has been written in the news media about this small section of the Affordable Care Act, but as a physician looking forward to retirement, it is of concern. In fact, the law specifically states that this reserve force must be able to respond on short notice and may even have to serve “involuntarily.”  Does this mean that they can keep me from retiring and put me in a medically underserved community which may need a cardiothoracic surgeon? The way I read the law, the answer is “yes.”
The uses of this Ready Reserve Corps would be to “ (A) participate in routine training to meet the general and specific needs of the Commissioned Corps; (B) be available and ready for involuntary (emphasis added) calls to active duty during national emergencies and public health crises, similar to the uniformed service reserve personnel; (C) be available for backfilling critical positions left vacant during deployment of active duty Commissioned Corps members, as well as for deployment to respond to public health emergencies, both foreign and domestic; and (D) be available for service assignment in isolated, hardship, and medically underserved (emphasis added) communities …to improve access to health services.”
On July 2, 2008, President Obama stated that “We cannot continue to rely on our military in order to achieve the national security objectives that we’ve set,” he said. “We’ve got to have a civilian national security force that’s just as powerful, just as strong, just as well-funded.” Could the Affordable Care Act be the first legislation used in setting up this new national security force and will the physicians so drafted be the spear-head of this force? Why should a civilian national security force need to be just as powerful as our military? Why does it need to be as well-funded? Will this force be armed with military style weapons? This seems to be overkill to me but there is not much on the internet or in the main stream media to help discern the role of this force.
Would this new force be constitutional? The ACA funds it and the Commissioned officers of the ready reserve are to be appointed by the President. This would be different than the commissioned officers of the regular corps which are appointed by the President with the advice and consent of the Senate emphasis added. Why no requirement for the advice and consent of the Senate for the officers of the ready reserve corps? I don’t know but I am worried. Who will the president appoint? What kind of power will these officers have? Will it be the same type of power as the regular corps or will there be differences? Where will the checks and balances be if the Senate has no role in deciding who these officers will be; this is very different from the requirements of the other uniformed services. Why the difference? Will this force only be answerable to the President?
Nancy Pelosi infamously stated that we would have to pass the Affordable Care Act in order to find out what was in it. What she has stated has now come to pass.
Sections of the ACA that I thought were clearly unconstitutional have passed Supreme Court scrutiny. First, mandating the purchase of health care insurance was deemed to be a proper exercise of the taxing power of the United States. Originally, President Obama stated that this power was allowed under the Commerce Clause and it was not (emphasis added) a tax. Justice Roberts stated the opposite in his opinion. The mandate was not allowed under the Commerce Clause but it is allowed as a tax. Oh, well.
The other Supreme Court decision that I was way off on was the case of King v. Burwell. Originally, the ACA would only allow tax credits for those who used exchanges that had been set up by the States. When States did not set up an exchange, then the Federal government would set one up but the people in those states would not be given any tax credits which were intended to help pay the premiums for the health insurance. The intent of the Congress was to get the States to buy into Obamacare but many of the states chose not to do this.
Despite the clear language of the statute, the Internal Revenue Service, under the direction of the White House, started giving tax credits to everyone, even to those in States that had not set up an exchange. The Executive Branch is supposed to enforce the law, not change it. When this issue made it to the Supreme Court, the Court decided to repair the law. Since the Judicial branch is supposed to state what the law is, it seems like the Court was overstepping its authority when they essentially changed the law such that State exchanges really meant State and Federal exchanges.
By its decision, the Court essentially gave the Internal Revenue Service the authority to spend billions of dollars on tax credits for those using the federal Exchanges. The power of the purse, I thought, was to be invested to the legislature, not the Court. Boy, was I wrong.
It is said that the Supreme Court is not last because it is right, it is right because it is last. There must be finality in the law or we will have a society in disarray. Asking me to make a prediction as to a law’s constitutionality would not be a good idea; I am often wrong, especially as it relates to Obamacare.  Section 203(c)(2)(B) of the Affordable Care Act.
National Federation of Independent Business, et al., v. Kathleen Sebelius, Secretary of Health and Human Services, 648 F.3d 1235.
On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (ACA)[i]. The intent of the law was to provide health insurance to all Americans while, at the same time, lowering the health care costs for the people and the United States government. Although it seems counterintuitive, President Obama promised that the plan would lower the cost of health insurance premiums while at the same time, reduce government spending. It is hard to see how this promise could have been sincere, especially since the plan would have added over 30 million patients into the mix.
I think most would agree that health care is expensive. In 2009, the United States spent 17.3 percent of our gross domestic product (GDP), about $2.5 trillion on health care. This was the most spent for health care by any country in the world. We also spend more than any other country on defense. I think both of these things are good. We should be spending on health care and defense to maintain our way of life which I believe is the best.
Proponents of Health Care change make claims that despite spending more on health care than other countries, the United States lags behind in critical health care measures such as life-expectancy and infant mortality. However, a critical look at these measures shows that the United States is really not so bad.
While it is true that life-expectancy in the United States is less than about 30 other countries, it is likely related to the high homicide rate in America along with the high death rate from auto accidents, both of which are much higher than those found in other Western countries. If we factor out homicides and auto accident fatalities, then the United States has the longest life-expectancy. Homicides and auto related deaths, while concerning, should not count on our quality of health care analysis.[ii]
Infant mortality is defined differently depending on the country. Since the definitions differ, it is not surprising that the rates differ. In America, a birth is counted as live if there is any sign of life, regardless of the birth weight or gestational age. This follows the World Health Organization (WHO) definition which defines a live birth as one where the infant, removed from the mother, “breathes or shows any other evidence of life such as beating of the heart, pulsation of the umbilical cord, or definite movement of voluntary muscles.”[iii]
In Switzerland, the baby must be at least 30 centimeters long at birth to be counted as a live birth[iv]. Even if it’s breathing and the heart is beating, a subsequent death will not be counted as an infant mortality in that country if the baby is shorter than 30 centimeters.
In France, there must be a medical certificate stating that the baby was born alive and viable. Without that certificate, a subsequent death will not count as an infant mortality. Also, in France and Belgium, babies born before twenty-six weeks are counted as deaths even if they fit the WHO criteria for live birth.[v] It’s obvious that using infant mortality rates as a measure of quality health care is a disingenuous argument for those claiming our health care system is not so good.
I believe that the cost of our health care is reasonable for what we get. It is the best health care in the world. Many of our treatments lead the way for both cure and palliation. Cancer treatments, Human Immunodeficiency Virus (HIV) care, and cardiac and vascular surgery advances are the best in the world. When Russian President Boris Yeltsin needed heart surgery, they sent for Dr. DeBakey’s team from Baylor in Houston.
It is not unusual for other world leaders to send their families or themselves to our country for their own care. When I was a resident at the University of Chicago, it was not unusual for world leaders to take over a hospital floor while they were cared for at that facility. I was even reprimanded by the United States Secret Service when I mistakenly entered the area during one of my rounds.
Former Vice-President Cheney had a left ventricular assist device keeping him alive for quite a while until he was able to get a match for a heart transplant. He spoke to one of our surgical societies where he described his course. He was doing great and I could not see any detrimental effects of his prolonged illness. This type of care is available to all in the United States!
As a Cardiothoracic surgeon, I am frequently exposed to dangerous blood borne infections such as Hepatitis C and Human Immunodeficiency Virus (HIV). I was most fearful of Hepatitis C for which, until recently, there was no good treatment and the resulting death was from fulminant liver failure—not a pleasant way to go.
Now, there is a new drug, Sovaldi (sofosbuvir), to treat Hepatitis C and it is curative. It costs $80 thousand for a course of therapy but the illness would otherwise lead to death or to a liver transplant and further immunosuppressive drug therapy the costs of which would exceed the pills. It makes sense to use this new class of drugs but there is an on-going debate that the drug manufacturers are gouging the public. It is a breakthrough therapy where the developers are being chastised instead of honored. What a shame.
The high cost of drugs reminds me of when I was a young resident and surgeon. Tissue plasminogen activators (tPA) and other clot busters were being introduced as a way to treat patients with myocardial infarctions. The drug was expensive; over $2 thousand to save a heart attack victim. This was deemed exorbitant in the 1980’s. Now it is the standard of care and no one is complaining of the costs.
Drug companies spend millions of dollars on research and development of new therapies and they take a huge financial loss for the drugs that do not pan out. However, when they do have a success like with Hepatitis C, then I don’t have a problem with them charging high rates. This sends the right message to those involved in research and development that what they are doing will be rewarded if they are successful. We want the researchers to be advancing the science of medicine and this is the way to do it.
New endovascular techniques are allowing high risk patients to undergo complex aortic repairs and even aortic valve replacements. These patients would not have tolerated the difficult open procedures that would have been required in the past. With new aortic valves and aortas, many of these otherwise healthy individuals may live for another 10 or 20 years and the lives will be meaningful. Who wouldn’t want that?
Mary Lasker has been quoted as saying, “if you think research is expensive, try disease.”[vi] Sure it’s expensive, but life and health are among the most precious things we have. Who wouldn’t spend what is necessary to save a loved one or themselves?
My grandparents used to tell us to get the best doctors if we were sick and the best lawyers if we were confronted with legal problems. You’re looking for the best return on your investment and there is nothing more important than your life and health. It is said that there are problems that money can solve and then there are real problems. Perhaps we are spending more on health care because we are getting the best health care. I am OK with that and I think that most Americans would agree with me.
[ii] Glen Whitman, “Who’s Fooling Who? The World Health Organization’s Problematic Ranking of Health Care Systems,” CATO Institute, February 28, 2008.
[iii] Geneva Foundation for Medical Education and Research, Live Birth Definition.
[iv] David Hogberg, Ph.D., “Don’t Fall Prey to Propaganda: Life Expectancy and Infant Mortality are Unreliable Measures for Comparing the U.S. Health Care System to Others,” National Policy Analysis, July 2006.
[v] Bernadine Healy, “Behind the Baby Count.” US News and World Report, September 24, 2006.
[vi] Mary Lasker was a Health Activist and Philanthropist who raised funds for medical research. She helped found the Lasker Foundation. A Lasker Award is often a harbinger of the Nobel Prize as, at least 86 Lasker Award winners went on to win the Nobel Prize.