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Policymakers are considering legislative changes that would increase managed care organizations' exposure to civil liability for withholding coverage or failing to deliver needed care. Using a combination of empirical information and theoretical analysis, we assess the likely responses of health plans and Employee Retirement Income Security Act (ERISA) plan sponsors to an expansion of liability, and we evaluate the policy impact of those moves. We conclude that the direct costs of liability are uncertain but that the prospect of litigation may have other important effects on coverage decision making, information exchange, risk contracting, and the extent of employers' involvement in health coverage. [ABSTRACT FROM AUTHOR]

The merits of tax exemption for nonprofit health care providers have been hotly debated for decades. Mark Schlesinger and Brad Gray provide a useful, dispassionate meta-analysis of past research; they conclude that there are real differences in the performance of nonprofit and for-profit hospitals and nursing homes, although they vary along several key dimensions. Unfortunately, their findings offer no insight on whether these differences are large enough to justify a sizable subsidy and whether it makes more sense to use an undifferentiated subsidy tied to status (current practice), or a graduated subsidy tied to quantifiable and objective measures of performance. [ABSTRACT FROM AUTHOR]

The extent to which liability costs cause physicians to restrict their scope of practice or cease practicing is controversial in policy debates over malpractice 'crises.' We used insurance department administrative data to analyze specialist physician scope-of-practice changes and exits in Pennsylvania in 1993-2002. In most specialties the proportions of high-risk specialists restricting their scope of practice did not increase during the crisis; however, the supply of obstetrician-gynecologists decreased by 8 percent in the three years following premium increases in 1999. We discuss methodological issues that could explain the disparate findings regarding physician supply effects in studies using administrative data sets and survey data. [ABSTRACT FROM AUTHOR]