Midterm Examination

PADM 5791 Health Care Politics and Policy

Spring, 2010

Dr. Neubauer

Each of the following questions has multiple parts. I am looking for one solid, well-written paragraph per part of each question. In other words, if a question has three parts I am looking for a three-paragraph answer. Please write carefully and formally. Write in your own "voice" without quoting or paraphrasing the textbook or other sources. This examination is due to be returned by February 24, 2010.

1. The political system in the United States is fragmented "vertically" by federalism and "horizontally" by regionalism (think of the Kansas City metropolitan area). Why does the political fragmentation of the nation affect the emergence of (in)coherent public policies in energy, education, health care and other major policy area? Why would it be preferable for major public policies to be unitary and coherent in nature? Identify and explain the "50 laboratories of democracy" "defense" for how public policies exist in the United States.

2. Let's assume that the five major kinds of stakeholders in our nation's health care delivery system are employers, employees/patients, physicians, hospital administrators and executives of insurance companies. Whenever major policies are changed the "landscape" changes and stakeholders learn to "play" the new system to their own advantage. The policy was created with a specific intent. Often, there are unintended consequences as a result of perverse incentives created by the new policy. For each of the following two policies, describe the policy, identify the intent, and (in terms of the incentives and behaviors of the stakeholders) identify the unintended outcomes produced through unintended incentives to stakeholders.

• The Hill Burton Act of 1946 by which the federal government financed the construction of many new hospitals not only in medically underserved rural areas but also in other locations.

• The National Health Planning and Resources Development Act of 1974 (PL 93-641) which required hospitals and other health care facilities to gain Certificate of Need approval (from local boards) before making major expenditures or adding new services.

• The use of Diagnostic Related Groups of diagnoses as the basis of prospective payment for medical services to be performed. (Basically, the idea is that once a diagnosis is made the organization gets a set amount of money to respond to the patient's needs based on the nature and severity of the diagnosis.)

http://en.wikipedia.org/wiki/National_Health_Planning_and_Resources_Development_Act

http://en.wikipedia.org/wiki/Stuart_Altman

3. Medicaid has been variously referred to as a workhorse, Pac Man, and as a monster. In three solid paragraphs, explain the meaning of each metaphor and then in a fourth paragraph address why Medicaid cannot continue in its present form.

4. The concluding sentence of Chapter 4 of our textbook on Medicare is, "We live in a brave and scary new world." Identify and discuss the major challenges to "Medicare as we know it" that suggests that the way forward is scary if perhaps not brave.

5. Read the following two investigative reports. Many physicians will not serve Medicaid patients because of low rates of reimbursement. Medicare reimbursements are higher but still considered to be frugal. How are the physician-owned hospitals in this Texas city making money serving Medicaid and Medicare patients? What do you believe to be the ethical implications of the way medicine is being practiced here?

"Perverse incentive" in current health care system, says expert" by Jennifer Hyde and Drew Giffin, CNN Special Investigations, Feb. 11, 2010.

http://www.cnn.com/2010/POLITICS/02/10/health.care.costs/index.html?iref=allsearch

"Texas, Pelosi and the doctor bills," CNN Special Investigations, February 11, 2010

http://siu.blogs.cnn.com/2010/02/11/texas-pelosi-and-the-doctor-bills/