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Abstract: In recent years the nation's courts have expanded their influence in health policy in four areas: reviewing insurers' coverage decisions, deciding the adequacy of Medicaid payment rates to hospitals and nursing homes, arbitrating hospital mergers, and assessing hospitals' tax-exempt status. The major problem with developing health policy through the courts is that the courts' focus will be the concerns of the individuals or groups involved in specific cases, not the broader implications and overall objectives of the health care system. As alternatives to litigation to resolve policy conflicts, scholars have suggested negotiation, binding arbitration, clarification of legislative language, administrative courts, contract revision, and general restructuring of the decision-making process.
Prologue: The executive and legislative branches of federal and state governments participate visibly in the formation of U.S. health policy. In recent years, however, the health policy debate has expanded to include the nation's courtrooms. While the courts are no stranger to malpractice lawsuits and cases involving humane treatment of patients in state hospitals, recently questions of broader policy have ended up on courtroom dockets. In this paper Gerard Anderson examines four policy areas: review of coverage decisions made by public and private payers; analysis of the adequacy of Medicaid payment rates to hospitab and nursing homes; review of hospital mergers in light of antitrust laws; and examination of the tax-exempt status of nonprofit hospitab. Health policy is not the only area in which courts have assumed an active role; in the past, other social policy issues such as school desegregation, the environment, and prison reform have been debated in and shaped by the nation's courts. Critics question the appropriateness of deciding issues with such sweeping ramifications in the courtroom, where the focus is on the merits of an individual case and not on the broader implications of decisions rendered. The courts are likely to remain involved, however; in light of this, Anderson offers his suggestions for improving judicial resolution of health policy issues. Anderson has been director of the Center for Hospital Finance and Management at The Johns Hopkins Health Institutions in Baltimore, Maryland, since 1987. He received his doctoral degree in public policy analysis from the University of Pennsylvania. His last published work in Health Affairs drew lessons for the United States...