See Bator, F. M., “The Anatomy of Market Failure,” Quarterly Journal of Economics 72, no. 3 (1958): 351–379, for a seminal early article on the phenomenon. Bator's definition is “the failure of a more or less idealized system of price-market institutions to sustain ‘desirable’ activities or to estop ‘undesirable’ activities” (at 351). He defines desirability in terms of maximum welfare, acknowledging the central theorem of modern welfare economics that “under certain strong [idealized] assumptions…, the equilibrium conditions which characterize a system of competitive markets will exactly correspond to the requirements of Paretian efficiency” in which no one can be made better off in terms of his own preferences without making someone else worse off.CrossRefGoogle Scholar

The classic discussion of market failure in health economics is Arrow, K. J., “Uncertainty and the Welfare Economics of Medical Care,” American Economic Review 53, no. 5 (1963): 941–973. Some goods, Arrow argues, are not “marketable.” This occurs when the existing market fails “to provide a means whereby the services can be both offered and demanded upon payment of a price.” For market failure in health care Arrow focuses his greatest attention on risk-bearing. “The ability to shift the risks of illness to others is worth a price which many are willing to pay. Because of pooling and of superior willingness and ability, others are willing to bear the risks. Nevertheless… a great many risks are not covered, and… the markets for the services of risk-coverage are poorly developed or nonexistent…” (at 945). While Arrow here has in mind primarily cases affected by moral hazard and adverse selection, a few pages later (at 947–948) he anticipates additional types of market failure with an observation about people's preference for government taxation and expenditure. This would appear to be a preference for redistribution, but it can also be interpreted as “desire for insurance. The subsidies… go to those who are disadvantaged in life by events the incidence of which is popularly regarded as unpredictable: The blind, dependent children, the medically indigent.” He follows this (at 963–964) with further discussion of pooling. “Hypothetically, insurance requires for its full social benefit a maximum possible discrimination of risks. Those in groups of higher incidences of illness should [actuarially] pay higher premiums. In fact, however, there is a tendency to equalize… premiums, especially in the Blue Cross and similar widespread schemes. This constitutes, in effect, a redistribution of income from those with a low propensity to illness to those with a high propensity. The equalization, of course, could not in fact be carried through if the market were genuinely competitive….Insurance plans could arise which charged lower premiums to preferred risks and draw them off, leaving the plan which does not discriminate among risks with only an adverse selection of them.” Thus that which is socially optimal – the availability of insurance to all, not just those least likely to be ill – cannot be achieved in unconstrained market competition.Google Scholar

Either that, or everyone must be put in one pool – that is, a “single payer” insurance system. I will not pursue the single payer option explicitly in this paper. It, too, constitutes a solution to market failure. Single payer and mandatory multi-payer insurance are solutions for the same essential reason: All, the likely well and likely ill alike, contribute to insurance funding. If we are weighing the respective advantages and disadvantages of a system of many competing insurance plans compared to a single payer system, the previous discussion of the remedies for market failure implies that the appropriate comparison to single payer is not a completely voluntary and unfettered market, but a multi-payer system structurally adjusted to account for market failure – one with guaranteed issue, no pre-existing condition exclusions, relatively common premiums, and mandated basic insurance. Advocates of single payer who cite the various ills of market failure sometimes fail to acknowledge that single payer is not the only way to avoid those ills.Google Scholar

Note several things here. (1) The argument conveyed in the rhetorical questions just asked does not amount to the claim that a person should take responsibility for another's misfortune. It is only a claim that one should partially share the burdens of another who is blameless. (2) This sentence and the previous two constitute the heart of the philosophical argument against the strict libertarian view of distributive justice and for something like EOW (defined in the next paragraph). In so far as this is a reasonably strong philosophical argument for Just Sharing and EOW, the argument in this section is fundamentally philosophical. That should be kept in mind even as the case I develop in the rest of this section shifts to an appeal to a social fact about EOW – that something like it covers a very wide range of the moral views about justice held by the U.S. population.Google Scholar

The label EOW is used by Richard Arneson for his version of this view in “Equality and Equal Opportunity for Welfare,” Philosophical Studies 56, no. 1 (1989): 77–93; “Liberalism, Distributive Subjectivism, and Equal Opportunity for Welfare,” Philosophy and Public Affairs 19, no. 2 (1990): 158–193; Cohen, G. A. articulates a similar view in “On the Currency of Egalitarian Justice,” Ethics 99, no. 4 (1989): 906–944; EOW as stated here and in the views of Arneson and Cohen resides in a family of views referred to as “luck egalitarian” justice. In Health, Luck and Justice (Princeton, NJ: Princeton University Press, 2010), S. Segall provides an admirable summary of such views and states his own version: “It is unjust for individuals to be worse of than others due to outcomes that it would have been unreasonable to expect them to avoid” (at 13). The views are “luck egalitarian” because they all see justice not as generally equalizing whatever is the proper object of equalization in a theory of justice (welfare, for example), but equalizing it only in order to compensate for bad “brute luck.” Bad brute luck (e.g., being hit by a falling tree one had no reason to suspect would fall) is distinguished from bad “option luck,” luck that occurs in a chain of events in which one's own voluntary choices play a role. Justice requires equalization only for bad brute luck, not bad option luck. Examples of the latter include buying many lottery tickets but not winning, or playing Russian roulette and ending up dead. A more debatable example that some would regard as bad option luck and others would not is becoming seriously diabetic after years of heavy sugar intake and modest obesity; though heavy sugar ingestion and obesity are well known risk factors for diabetes, most people who heavily ingest sugar and are obese do not develop diabetes. See Chapter 3 of Segall for an extensive discussion of bad option luck.CrossRefGoogle Scholar

The Emergency Medical Treatment and Active Labor Act (1998), Pub. L. No. 99–272, 100 Stat. 164, codified as amended at 42 U.S.C. 1395dd [hereafter referred to as EMTALA].Google Scholar

Significant substantive elements of this and the previous section are also articulated by the author in “A Cultural Moral Right to a Basic Minimum of Accessible Health Care,” Kennedy Institute of Ethics Journal 21, no. 1 (2011): 79–120, at 83–90, and in “Justice, Liberty, and the Choice of Health System Structure,” in Rhodes, R. Battin, M. Silvers, A., eds., Medicine and Social Justice, 2nd ed. (New York, NY: Oxford University Press, 2012).CrossRefGoogle Scholar

See EMTALA, supra note 6. See also Lee, T. M., “An EMTALA Primer: The Impact of Changes in the Emergency Medicine Landscape on EMTALA Compliance and Enforcement,” Annals of Health Law 13 (2004): 145–178. An important element conditions the requirement: If another hospital designated and financed to provide care to uninsured persons is located within a feasibly safe transportable distance, then a hospital does not have to accept non-paying patients.Google Scholar

Stoll, K. Bailey, K., Hidden Health Tax: Americans Pay a Premium (Washington: Families USA, May 2009), available at <http://www.familiesusa2.org/assets/pdfs/hidden-health-tax.pdf>(last visited August 24, 2012). A similar annual effect on premiums from cost-shifting for uncompensated care, $948, was found in Maryland, reported by R. Cowdry (Executive Director) in “Compendium of Policy Options,” staff presentation to the Maryland Healthcare Commission, February 27, 2007; cited by Moffitt, R. E., “Choice and Consequences: Transparent Alternatives to the Individual Insurance Mandate,” Harvard Health Policy Review 9, no. 1 (2008): 223–233, at 225.Google Scholar

Much of this and the next subsection are adapted by the author from “Justice, Liberty, and the Choice of Health System Structure,” supra note 7.Google Scholar

PFR is often referred to in the philosophical literature as the “Principle of Fairness” or the “Duty of Fair Play.” See Hart, H. L. A., “Are Their Any Natural Rights?” Philosophical Review 64, no. 2 (1955): 175–191, at 185; Nozick, R., Anarchy, State, and Utopia (New York, NY: Basic Books, 1974): At 93–95; Schmidtz, D., The Limits of Government: An Essay on the Public Goods Argument (Boulder, CO: Westview Press, 1991): 146; and the excellent survey of the philosophical literature by Morelli, J., “The Fairness Principle,” Philosophy and Law Newsletter, American Philosophical Association, Spring 1985, at 2–4. The “fair share” and “willing to pay” elements already cover the exemption from an obligation to contribute that obtains when people are unable to pay. In their case, either the truly fair share of payment is virtually nothing, or, given their meager resources, they would not have been willing to pay to get the benefits, and thus have no duty to pay just because we cannot now exclude them from the benefits. I do not attempt here a justification of PFR itself, in any version. It is possible that there are no more fundamental reasons behind PFR to provide its justification. It might be needed to explain why any moral principle can bind people at all: Morality as a whole is the collective enterprise, and a reasonable degree of obedience is the fair share everyone is obligated to pay to gain the non-excludable benefits of morality as a social institution.CrossRefGoogle Scholar

Menzel, P., Strong Medicine: The Ethical Rationing of Health Care (New York, NY: Oxford University Press, 1990): At 29–31.Google Scholar

That it is not has been persuasively argued by Nozick, , supra note 11, at 94.Google Scholar

For sometimes differing treatments of when free-riding is unfair (i.e., is genuine free-riding), see the various authors in supra notes 11 and 12.Google Scholar

If hypothetical consent has to be embraced to operate with PFR in the actual world, another difficulty in using the principle to justify coercion will still have to be confronted: Some legitimate “honest holdouts” may remain, people who receive benefits from the enterprise less than their share of its costs. Coercive payment laudably catches many free-riders but in the real world will also likely catch some who really do prefer to forgo all benefits to paying their share of costs (see Schmidtz, , supra note 11, at 84). Why should they, too, have to fund what is then essentially other people's chosen projects? Perhaps, then, all we have is a PFR principle that proclaims free-riding to be regrettable, not one in which it is objectionable enough to justify coercively extracting contribution. Additional considerations, however, push PFR toward justifying coercion. (1) Honest holdouts and free-riders are not necessarily different people. If the good the collective enterprise produces is virtually universal, then even if one is an honest holdout because one judges benefit insufficient to balance fair-share cost, the matter may be a close call. And even if being an honest holdout should block enforced participation, the fact remains that if the enterprise proceeds and one is not required to pay, one still gets for free a benefit that may be nearly worth the cost. (2) Another balance-of-cost-and-benefit factor is also relevant: How close do the alternative arrangements of private contract and individual voluntary decision come to achieving benefits equivalent to those of the collective enterprise imposing contribution? The closer they come, the weaker the case for the collective enterprise and enforcing a contribution to prevent free-riding.Google Scholar

These conditions are elaborated more in Menzel, , “Justice, Liberty, and the Choice of Health System Structure,” supra note 7.Google Scholar

See EMTALA, supra note 6, and Lee, supra note 8.Google Scholar

See Stoll, Bailey, , supra note 9.Google Scholar

Not only is the immediate moral call of rescue more clearly in play in emergency care than in most other care, but financial responsibility for mandating it can be rather conveniently dodged because “backdoor” financing is feasible. Emergency care is provided by sizable institutions (hospitals) large enough to absorb immediate costs and shift them. No such hidden financing is as feasible for primary care, which is usually delivered in smaller institutional settings.Google Scholar

These interpersonal benefits are above and beyond the benefits to them of their own insurance that they will have if they are required to buy it.Google Scholar

Such free-rider considerations may explain a great deal of the predominant attitude toward insurance in countries such as Germany and the Netherlands, where all non-indigent, low and middle income citizens are expected and required to get insurance. See Kirkman-Liff, B., “Health Insurance Values and Implementation in the Netherlands and the Federal Republic of Germany,” JAMA 265, no. 19 (1991): 2496–2502; and Heubel, F., “Patients or Customers: Ethical Limits of Market Economy in Health Care,” Journal of Medicine and Philosophy 25, no. 2 (2000): 240–153. A person who needs care but who has not insured carries social and moral disgrace, reflecting not so much paternalistic disdain for those who fail to care for themselves but condemnation for neglecting one's social responsibilities and free-riding on others.CrossRefGoogle Scholar

Moreover, in practical terms, a mandate may be very “soft,” exacting as the penalty for non-compliance only a partial contribution viewed as compensation for the costs they impose on others. This, arguably, is the nature of the “mandate” in the 2010 health reform law, Patient Protection and Affordable Care Act (2010), U.S. Pub. L. No. 111–148 and supplement Pub. L. No. 111–152, Health Care and Education Reconciliation Act, available at <www.opencongress.org/bill/111–h3590/text>(last visited August 21, 2012) [hereafter referred to as PPACA]. The act's mandate is certainly soft: No coercion, other than a penalty of $750 added to one's tax liability. If the Families USA study of 2005. (see Stoll, , supra note 9) is correct, then the act's “mandate” does not even recoup the costs that going uninsured shifts to others. Even then, unaccounted for, is a “remainder” of free-riding that occurs through unavoidable receipt of the public-good benefits enumerated several paragraphs previously.(last+visited+August+21,+2012)+[hereafter+referred+to+as+PPACA].+The+act's+mandate+is+certainly+soft:+No+coercion,+other+than+a+penalty+of+$750+added+to+one's+tax+liability.+If+the+Families+USA+study+of+2005.+(see+Stoll,+,+supra+note+9)+is+correct,+then+the+act's+“mandate”+does+not+even+recoup+the+costs+that+going+uninsured+shifts+to+others.+Even+then,+unaccounted+for,+is+a+“remainder”+of+free-riding+that+occurs+through+unavoidable+receipt+of+the+public-good+benefits+enumerated+several+paragraphs+previously.>Google Scholar

Pear, R. Herzenhorn, D. M., “G.O.P. Counters with a Health Plan of Its Own,” New York Times, November 3, 2009, available at <http://www.nytimes.com/2009/11/04/health/policy/04health.html>(last visited August 21, 2012) Herszenhorn, D. M., “Budget Monitor Says G.O.P. Bill Leaves Many Uninsured,” New York Times, November 4, 2009, available at <http://prescriptions.blogs.nytimes.com/2009/11/04/budget-monitor-questions-impact-of-gop-health-bill>(last visited July 15, 2011) “Hoping to Show the G.O.P's Role,” New York Times, February 21, 2010, at A17.(last+visited+August+21,+2012)+Herszenhorn,+D.+M.,+“Budget+Monitor+Says+G.O.P.+Bill+Leaves+Many+Uninsured,”+New+York+Times,+November+4,+2009,+available+at+(last+visited+July+15,+2011)+“Hoping+to+Show+the+G.O.P's+Role,”+New+York+Times,+February+21,+2010,+at+A17.>Google Scholar

Moffitt, , supra note 9, articulates perhaps the most persuasive array of measures just short of mandate, including reversible auto-enrollment. Two other helpful discussions are by. Capretta, J. C. Miller, T. P., “The Insurance Fix,” National Review, November 2, 2009, available at <http://www.eppc.org/publications/pubID.3975/pub_detail.asp>(last visited August 21, 2012) “How To Cover Pre-Existing Conditions,” National Affairs, no. 4, Summer 2010, available at <http://www.nationalaffairs.com/publications/detail/how-to-cover-pre-existing-conditions>(last visited August 21, 2012).(last+visited+August+21,+2012)+“How+To+Cover+Pre-Existing+Conditions,”+National+Affairs,+no.+4,+Summer+2010,+available+at+(last+visited+August+21,+2012).>Google Scholar

For example, Pauly, M. V. Danzon, P. Feldstein, P. J. Hoff, J., Responsible National Health Insurance (Washington, D.C.: American Enterprise Institute Press, 1992). Mandates did play a prominent role in one of 2009's most attention getting essays. In urging a radical market-oriented revision of U.S. health care, David Goldhill in “How American Health Care Killed My Father,” The Atlantic, September 2009, at 38–55, advocates the use of mandatory “catastrophic” insurance for high expenses and sizable mandatory health savings accounts for more ordinary expenses. In the context of 2009 Goldhill was an unusually independent conservative voice, writing from the vantage point of neither a political group nor an ideologically identified research institute.Google Scholar

See Pauly, et al. , supra note 25.Google Scholar

Some will think that health care systems cannot, or should not, rely on competitive markets at all for the distribution of insurance. Even if the case for such a position is in the end persuasive, articulating arguments for universal access to basic care that take markets as a serious possibility have the merit of speaking to a wider portion of the political spectrum than arguments that do not.Google Scholar

Ronald Dworkin calls this the perspective of the prudent insurer (subscriber); see “Justice and the High Cost of Health,” in Sovereign Virtue: The Theory and Practice of Equality (Cambridge, MA: Harvard University Press, 2000): At 307–319; Hall, M., Making Medical Spending Decisions: The Law, Ethics, and Economics of Rationing Mechanisms (New York, NY: Oxford University Press, 1997): At 193–227, defends the use of a similar perspective through his notion of “bundled consent.” As “prior consent,” so also does Menzel. supra note 12, at 3–36.Google Scholar

This is precisely the proposal by Goldhill, , supra note 25.Google Scholar

In a single payer or national health service system, basic care's content must be derived by asking what care, for anyone with the requisite medical need, the society can justify requiring people to pay taxes to fund.Google Scholar

In “A Cultural Moral Right…,” supra note 7, at 97–105, Menzel, P., “Setting Priorities for a Basic Minimum of Accessible Health Care,” in Rhodes, R. Battin, M. Silvers, A., eds., Medicine and Social Justice, 2nd ed. (New York, NY: Oxford University Press, 2012): At 131–141.CrossRefGoogle Scholar

See PPACA, supra note 22.Google Scholar

This judgment also applies in a single payer or a national health service context. There, too, ignoring effectiveness of care will be exploitation by providers and patients – in this case, of taxpayers rather than premium payers.Google Scholar

Examples are many. A prominent procedure is arthroscopic surgery for osteoarthritis of the knee; used relatively frequently, it absorbed nearly $4b of expenditure in 2000; see Moseley, J. B. O'Malley, K. Petersen, N. J. Menke, T. J. Brody, B. A. Kuykendall, D. H. Hollingsworth, J. C. Ashton, C. M. Wray, N. P., “A Controlled Trial of Arthroscopic Surgery for Osteoarthritis of the Knee,” New England Journal of Medicine 347, no. 2 (2002): 81–88. and Franklin, G. M. Budenholzer, B. R., “Implementing Evidence-Based Health Policy in Washington State,” New England Journal of Medicine 361, no. 18 (2009): 1722–1725. Another apparently ineffective treatment, though at this point only shown to be so in one trial, is Merck's cholesterol drug Zetia; see Singer, N., “Investors Seem Unshaken After Study of Merck Drug,” New York Times, November 17, 2009, at B3. Interestingly, the study showing Zetia to be ineffective was regarded by investors as good news, since some had feared the study would show it to be harmful. In this case, apparently, only a showing of harm is taken as sufficient reason not to market and use a drug! A showing of ineffectiveness is still reason to market and use it, revealing how low on the effectiveness score the U.S. in practice can sink.CrossRefGoogle Scholar

An example is CT colonography, which is apparently less cost-effective than colonoscopy for the same conditions. See Franklin, Budenholzer, , supra note 34. Saltman, R. B., “Cost Control in Europe: Inefficiency Is Unethical,” Cost Control and Health Care Reform, Act 1 (Health Care Cost Monitor, The Hastings Center, 2009), at 37–39, available at <http://www.thehastingscenter.org/uploadedFiles/Publications/Primers/2009-Health-Care-Cost-Monitor-Act-1.pdf>(last visited August 21, 2012).Google Scholar

Gilbert, S., “The Nesting-Egg Problem: Why Comparative Effectiveness Research is Trickier Than It Looks,” Hastings Center Report 39, no. 6 (2009): 11–14.CrossRefGoogle Scholar

This is the concern of Jerome Groopman, e.g., as portrayed by Leonhardt, D., “Dr. James Will Make It Better,” New York Times Magazine, November 8, 2009, at 31–37, 44–47.Google Scholar

See Franklin, Budenholzer, , supra note 34.Google Scholar

Chen, P. W., “A Tool to Strengthen the Doctor-Patient Relationship,” Hastings Center Report 39, no. 6 (2009): 15–17.CrossRefGoogle Scholar

See Moseley, et al. , supra note 30; Franklin, Budenholzer, , supra note 34; and Kirkley, A. Birmingham, T. B. Litchfield, R. B. Giffin, J. R. Willits, K. R. Wong, C. J. Feagan, B. G. Donner, A. Griffin, S. H. D'Ascanio, L. M. Pope, J. E. Fowler, P. J., “A Randomized Trial of Arthroscopic Surgery for Osteoarthritis of the Knee,” New England Journal of Medicine 359, no. 11 (2008): 1097–1107.Google Scholar

Nord, E., Cost-Value Analysis in Health Care: Making Sense of QALYs (Cambridge, UK: Cambridge University Press, 1999); Menzel, P. Gold, M. Nord, E. Pinto-Prades, J.-L. Richardson, J. Ubel, P., “Toward a Broader View of Values in Cost-Effectiveness Analysis of Health,” Hastings Center Report 29, no. 3 (1999): 7-15.CrossRefGoogle Scholar