Block Grants: Sound Theory or Doomed to Fail?

Block grants are all the rage. Take the latest G.O.P. proposal to repeal and replace the Affordable Care Act: the Graham-Cassidy bill. It proposes to replace the current system and instead give grants to the states, essentially taking the funds the federal government now spends under the ACA for premium subsidies and Medicaid expansion and give those funds to the states as a lump sum with little regulation.

There is a complicated formula by which the bill proposes divvying up this money among the states. Many think the formula is unfair, that it benefits red states over blue states, and that it just flat isn’t enough money. These are incredibly important concerns. But let’s put them to the side for just a moment and consider the theory behind block granting. Is there any world, for instance assuming that the amount and allocation of the funding could be resolved (probably crazy talk), in which switching to block granting may actually improve upon the status quo?

Proponents of block granting health care make two main arguments. First, it will reduce costs. By block granting Medicaid and the ACA subsidies, we end the blank check open entitlement that these programs have become and give states more skin in the game. Second, these cost savings will come from empowering states to innovate. States will become more efficient, improve quality, and solve their own state-specific problems.

These arguments have an understandable appeal. But how will states really react to providing health care coverage on a budget? Continue reading

President Trump’s Tort Reform

By Alex Stein

President Trump’s budget for Fiscal Year 2018 proposes a thoroughgoing reform of our medical malpractice system [Executive Office of the President of the United States, Major Savings and Reforms, Budget of the U.S. Government, Fiscal Year 2018, at 114 (2017) (hereinafter, the “Budget”)]. The reform’s stated goals are “[to] reduce defensive medicine … limit liability, reduce provider burden, promote evidence-based practices, and strengthen the physician-patient relationship.”

To achieve these goals, the reform will introduce the following measures:

  • a cap on non-economic damage awards of $250,000 (adjustable to inflation);
  • a three-year statute of limitations;
  • allowing courts to modify attorney’s fee arrangements;
  • abolition of the “collateral source” rule (to allow judges and jurors to hear evidence of the plaintiff’s income from other sources such as workers’ compensation and insurance);
  • creating a safe harbor for clinicians who follow evidence-based clinical-practice guidelines.

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