Implications of ERISA for health benefits and the number of self-funded ERISA plans

This Issue Brief provides an overview of the issues relating to the Employee Retirement Income Security Act of 1974 (ERISA) and health benefit plans, the major case law relating to ERISA and health plans, and the implications of the preemption of state regulations for health plan sponsors and participants. It also presents the latest data on the number of health plan participants in self-funded ERISA plans. Finally, it presents a summary of current legislative proposals that would attempt to amend ERISA. Under the framework ERISA established for employee benefit plans, the regulation of employment-based health benefit plans has evolved into a two-tiered system in which both federal and state laws play important roles. The Supreme Court has interpreted ERISA's "savings" and "deemer" clauses to mean that insured plans are subject to regulations directly at the federal level and indirectly at the state level, while self-funded plans are regulated exclusively at the federal level. The ERISA statute and the courts' interpretations of the Act have created a sharp controversy over how employee health benefit plans are provided and administered, with state regulators and consumer advocates on one side of the debate and plan sponsors (e.g., employers and unions) on the other. State regulators and consumer advocates tend to favor more regulation, and in many instances greater regulation at the state level, which they argue would provide more protections for consumers. However, employers and unions (or any plan sponsors) think ERISA preemption is very important to their ability to provide innovative and cost-effective health benefits for their employees, and assert that ERISA's present structure should be preserved. The U.S. General Accounting Office (GAO) found that 44 million individuals (39 percent of those in ERISA plans) were enrolled in self-funded ERISA plans in 1993, up from 39 million (33 percent of those in ERISA plans) in 1989. The Employee Benefit Research Institute (EBRI), using the same methodology as GAO with 1995 data, estimated that 48 million individuals (39 percent of those in ERISA plans) were enrolled in self-funded ERISA plans in 1995. When policymakers look to amend ERISA, they should consider whether the change to ERISA will produce a higher level of quality for consumers than is being provided under the present system and will continue to do so in the future. Policymakers must also decide whether quality of care is better enhanced by health plans' greater exposure to liability or by market forces. If policymakers decide that increased exposure to liability is the route to go, will consumers be able to enjoy any potential improvement in quality or will more individuals end up uninsured because of increased costs and not be able to get any care regardless of the quality?     

Sample selection in radiocarbon dating

Archaeologists working on the island of O'ahu, Hawai'i, use radiocarbon dating of samples of organic matter found trapped in fish-pond sediments to help them to learn about the chronology of the construction and use of the aquicultural systems created by the Polynesians. At one particular site, Loko Kuwili, 25 organic samples were obtained and funds were available to date an initial nine. However, on calibration to the calendar scale, the radiocarbon determinations provided date estimates that had very large variances. As a result, major issues of chronology remained unresolved and the archaeologists were faced with the prospect of another expensive programme of radiocarbon dating. This paper presents results of research that tackles the problems associated with selecting samples from those which are still available. Building on considerable recent research that utilizes Markov chain Monte Carlo methods to aid archaeologists in their radiocarbon calibration and interpretation, we adopt the standard Bayesian framework of risk functions, which allows us to assess the optimal samples to be sent for dating. Although rather computer intensive, our algorithms are simple to implement within the Bayesian radiocarbon framework that is already in place and produce results that are capable of direct interpretation by the archaeologists. By dating just three more samples from Loko Kuwili the expected variance on the date of greatest interest could be substantially reduced.     

Primary care networks: choose your physicians wisely

As hospitals and health care systems maneuver for a position in the integrated health care delivery system, no initiative is more important than building an effective and competitive primary care network. Yet this critical initiative is fraught with potential pitfalls. In their haste to develop primary care networks, hospitals and health care systems may fail to thoroughly evaluate network participants and in turn create large, inclusive, and inefficient primary care networks that don't come close to breaking even, much less repay practice acquisition costs. In an effort to become more efficient, practitioners often find themselves in the unenviable position of "de-selecting" peers retrospectively. The author presents criteria for evaluating and selecting network physicians.     

The medical practice as business organization

Medical practices historically have not been examined in terms of their organizational structures and of the appropriateness of their structures for survival as business entities. In this paper, we propose a model for the typical medical practice and discuss its fit with current organizational theory. It is apparent that the medical practice organization does not fit with the demands of a rapidly changing and complex environment. To survive and grow, the medical practice organization must align itself with others that have an interest and stake in the health care system, develop teamwork among physicians, bridge the gap between physicians and others in the organization, and recognize that the work done in the organization depends on other components of the organization.     

The changing academic health center. The death of the traditional academic physician

Organizational change is required if academic health centers (AHCs) are to survive the decreased societal commitment to them. The changes will generate significant emotional responses in the physicians employed by such institutions. This article presents an analogy between the reactions of academic physicians to the changes they are experiencing, and the stages of grief that Dr. Kübler Ross described in terminally ill patients. By placing physician responses in this context, emotional responses to organizational changes can be more easily understood and managed, allowing academic physicians to devote more energy to facing the threats to AHCs in an innovative and constructive manner.     

International labour migration statistics in Asia: an appraisal

"The present paper attempts a critical review of the data systems of seven major labour-exporting countries--Bangladesh, India, Indonesia, Pakistan, Philippines, Sri Lanka and Thailand--which account for over 90 per cent of labour outflows from Asia....Data...are discussed under separate sections focusing on limitations as well as potential for further exploitation.... For all countries reviewed here, these data significantly understate total labour outflows, and the magnitude of the error seems to vary between countries and reflect both differences relating to the coverage and efficiency of the approval and monitoring procedure. This throws serious doubts on the appropriateness of official outmigration series for cross country comparison. Frequent changes in reporting procedures also make for discrete changes and spurious shifts in data which render trend analysis quite hazardous." (SUMMARY IN FRE AND SPA)     

Physician organizations. Part 1: A report from the trenches of a start-up PO

How has Community Health Partners, a physician organization based in Kansas City, turned the corner as it rolls into the second year of operation? The biggest indicator is that CHP hammered out the city's first professional risk contracts and the PO has grown from 23 to more than 50 physician member/owners. Looking back, there are at least 10 reasons why CHP made it this far. These are not reasons you learn about in medical school or an MBA program. There is no one-size-fits-all template for building POs. No fixed organizational chart. No neon signs pointing to the best capital partner. Part I explores five reasons for success, such as having a strong board and physician leadership, as well as educating participating physicians about capitation and affiliating with any hospital or payer that really knows how to partner with physicians. Part 2 will focus on five more lessons learned from the trenches of a start up PO.