• 29 June 2009

Risk Governance and Deliberative Democracy in Health Care

Nan D. Hunter - Brooklyn Law School

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A risk governance paradigm provides the best theoretical framework for understanding both the health care system and health law. By “risk governance,” I mean a set of practices organized around principles of risk allocation, management, and distribution. Largely through the structures of managed care, the discourse of risk and insurance has migrated from traditional health finance questions into what has long been thought of as the heart of health care: the doctor-patient relationship.  Doctors and patients function—however hesitantly or reluctantly—as actors in an economy of risk.

My article addresses how risk governance thinking shapes both treatment protocols and judicial review of coverage decisions. In this summary, I focus on a third set of questions covered in the article: the political and normative argument for an approach to health care allocation decisions that fosters deliberative democracy.

Virtually everyone experiences the health care system, but the public’s knowledge about health-related policy involves far more breadth than depth. The system’s underlying structures of financial risk allocation are complex and not well known or understood. The result is that despite an intense media focus on the politics of reform, policy decisions are effectively hidden from the public, even if they are hidden in plain sight.

The public’s relation to health care policy also lacks, in large part, a participatory dimension. Limits on public understanding and knowledge are exacerbated by limits on mechanisms by which members of the public can participate effectively in health-related policymaking. Although individuals are increasingly empowered as patients, the idea that serious public engagement with health care system governance is a viable concept seldom surfaces in public consciousness.

In this article, I seek to offer both a normative argument for enhancing democratic engagement in health care system governance and a proposal for doing so grounded in the pragmatic spirit of democratic experimentalism. I argue that beyond the identities of patient and consumer, individuals should occupy the role of citizen in the health care system. Because governance encompasses more than just actions by the state, a meaningful concept of citizenship in the health care system must be applied to private sector institutions as well as to government.

 
I.
Building New Publics for Health Policy

One way to begin addressing the problem of Americans’ shallow engagement with health policy issues is to conceptualize such debates as occurring within a particular “public,” using the analytic structure developed by Jürgen Habermas.1 In Habermas’s work, the concept of a public denotes a cultural and social space for dialogue about shared concerns; there can be many publics. Habermas claims that the quality of society depends on the quality of our dialogic engagement on important issues. The quality of that engagement, in turn, depends on whether the procedures for engagement reflect core ethical concerns, such as equality of participation.

Because democracy is not possible without meaningful participation, we advance democratic norms in the governance of any system when we enhance the capacity of citizens to debate and discuss substantive issues and to participate in their resolution. Once one sees the health care system as centered on risk managerialism, the central issue for enriching the democratic characteristics of such a system becomes how to empower citizens to participate more effectively in the politics of risk allocation and distribution.

My suggestion is that we consider using risk pools as a venue for building publics in the Habermasian sense. A risk pool is the organizational and governance unit of any insurance plan. However, it is seldom thought of in terms of self-governance. Risk pools are actuarial constructs. They exist as clusters of individuals whose characteristics cause them to fall within some category of risk relevant to the form of insurance being sold (for example, the risk pool of teenage drivers or of beachfront property owners). They usually lack any social meaning for their members.

But the risk pools that compose almost all group health insurance are different in important ways. Employer-sponsored insurance (ESI) creates risk pools consisting of individuals who share a common employer, many of whom know each other, some quite well. Because membership in the plan is determined by reasons other than the goal of securing insurance, and because a large workplace plan invariably includes persons in a broad range of health status categories, ESI plans are “natural risk pools.” The link to employment creates a material reason for individuals not to exit the risk pool lightly, which diminishes the likelihood of high transaction costs for the insurer.

These same factors also make the ESI risk pool attractive as a site of governance for its participants. The link to employment that creates a material reason for individuals not to exit the risk pool also provides an incentive for employees to join a participatory risk governance process for the plan, were one to be offered. Many employees might welcome the opportunity to negotiate collectively with employers about health insurance benefits and other collective goods, without committing to full-scale union representation on all issues.2

Most importantly, a workplace health insurance group maps precisely onto a set of rich, dense, and strong social relationships. Using the work of Robert Putnam and other social scientists, employment law scholar Cynthia Estlund has built a powerful argument that democratic theory has underestimated the importance of workplaces in advancing democratic ends.3 Three of Estlund’s assertions stand out as relevant to the project of workplace-based risk pool governance. First, people often build their civic skills in the workplace, through discussions of political and other issues of public importance conducted in relatively public spaces. Second, outside of family or close friends, social ties at the workplace provide people with a stronger sense of belonging than any other institution in their lives. Third, greater racial diversity exists in the American workplace than in most other civic settings, including neighborhoods and schools.

The network of social connections at work also provides a useful foundation for effective governance of health risk. In the best case scenario, the social connections in work settings could facilitate the development of norms of reciprocity and trustworthiness, which in turn reinforce patterns of cooperation. This social capital helps to overcome problems of collective action, such as the resistance to engaging with difficult allocation decisions (the tragic choices problem) or the inclination to reject certain risks for oneself to achieve the gain that would result from someone else assuming them (the prisoner’s dilemma problem). The decision-making group grounded in a risk pool would operate without necessarily knowing what serious illnesses they or their families might suffer.

For these reasons, at least some workplace insurance plans have the potential to function also as publics. In ideal form, they would create space for political participation, debate, and opinion formation within the economic sector and as part of the system of risk managerialism. Their deliberations would require participants to engage with the arguments, concerns, and beliefs of others in the same risk pool, thus creating the potential for understandings that transcend self-interest.

Harnessing the economic power of risk pools to democratic governance structures could have a powerful effect on the quality of American political culture as it engages with health policy issues. Providing mechanisms for citizens to participate in shaping the parameters of their own health insurance could open up the discourse of risk allocation, which is currently dominated by management.

Finally, an important contribution of self-governance structures at the level of risk pools would be to make it easier for citizens to infuse risk allocation discourse with ethical values. As Deborah Stone has argued, insurance is a technology of governance that invites contemplation about issues of social responsibility because it requires resolution of questions about compassion and collective responses to suffering. In a world of individualism and competition, the very presence of insurance “legitimates social obligation and mutual aid.”4 More widespread citizen engagement with such issues would, in effect, democratize the norm setting implicit in the process of health insurance risk allocation.

 
II.
Concerns and Shortcomings

In contrast to my approach, many health policy experts argue for a complete de-linking of health insurance from the workplace. Their argument is that the economic distortions from an ESI system outweigh any benefits that come from administrative convenience. The most powerful argument against ESI is that it is doubly destructive: it fragments the overall population, thus undercutting social insurance principles, and it subsidizes individual health care consumption, thus creating moral hazard. Path dependency, not logical reasoning, has kept us locked into the workplace system for health insurance. I find these critiques of ESI to be compelling as rationales for a national, universal system of health care delivery, which I support. But given the enduring popularity of ESI, I offer a counter-perspective: infusing ESI risk pools with worker governance mechanisms could advance both democracy and justice.

I do, however, recognize that many shortcomings of an ESI system would carry over into attempts to foster greater employee control. Perhaps the bottom-line issue is how much power such democratized structures would have and how much discretion and authority employers would retain. It is naïve to imagine that such institutions could function outside of the power relations around them. Given those inequalities, the question is whether participants would be able to deliberate under conditions of egalitarian reciprocity and universal respect. If the aspiration of deliberative democracy is to create institutions that “tie[] the exercise of power to free reasoning among equals,” the very thickness of background social relations in a workplace may make it difficult to achieve that result among co-workers.5

Workplace power relations would inevitably produce problems in such an arrangement. Cooptation of workers by employer interests, the possible capture of the process by those most motivated to further their self-interest, or the simple failure of group members to fairly represent other workers all come to mind as possibilities. The history of gender and racial inequities within unions provides merely one example of the fact that more democratic norms in workplace relations are hardly a panacea for injustice.

Although these issues illustrate the ambitiousness and difficulty of using risk pool governance structures, the problems are not insurmountable. Ground rules would be necessary to prevent such groups from exacerbating, rather that moderating, inequities in health insurance. One protection would be to limit risk pool governance to the largest workplace groups, those with a significant degree of built-in diversity of interests. Additionally, legal restrictions to require justification for limitations on coverage would be necessary to counteract tendencies to exclude those with stigmatized diseases, such as HIV/AIDS. If we do achieve an expansion of insurance through health reform proposals currently under discussion, other ground rules would presumably include coverage of all (including part-time) employees and a minimum basic benefits package.

It is not practical to require every employer-sponsored plan to have a democratized risk pool governance structure. But it seems realistic to imagine that policies might be put in place to enable risk pool governance structures in workplaces with a large enough number of employees to constitute a robust risk pool and a meaningful degree of diversity. My goal here is not to set forth a full blueprint of a workplace-based risk pool governance structure. Rather, it is to encourage the idea of embarking on an experimentalist project through which these complexities can be explored.

 
III.
Toward Justice

The proposal that I have outlined speaks to how the concept, identity, and role of citizen can become a viable component of health care system governance. But it also offers the potential for advancing norms of distributional justice. Ideally, it could initiate a discourse of interdependency that could ultimately lead to greater equity.

Risk governance in health care represents a powerful compound of economic policy and moral normativity. The practices of risk allocation identify certain risks to be collective, others to be assumed by individuals; they mark certain actors as eligible for protection, others as not; and they incentivize certain conduct, but not all conduct, as socially beneficial because of its tendency to diminish risk. Allocating financial risk structures choices about who will receive what forms of care, who will pay for what kinds of illness, and how quality or negligence will be defined.

Our traditional constructs for addressing justice issues have not effectively engaged these health equity problems. Liberal rights discourse has never proven adequate or even fully relevant as a basis for confronting the gaping health care hole in the quality of American life. Negative liberty principles offer no purchase for contesting private actions, and even equality mandates that extend into the private sector seem insufficient for a problem that does not fit the minoritizing discourse of civil rights issues. Moreover, the individual fairness focus of a civil rights mandate can cut against an argument for community sharing of risk.

Debates on the ethical dimensions of health care have thus been dominated by the conflict between the insurance industry’s principle of “fair discrimination” in allocating risk and the solidarity norms of social insurance. For those who wish to advance equity in health care while still acknowledging the risk structure that governs the health system, it has been difficult to find a framework that engages both risk and equity in an effective manner.

Addressing issues of equity within a risk allocation paradigm offers a new and, I would argue, better way to capture and articulate the stakes at issue in the debate. It allows us (indeed, it forces us) to identify who gets included and excluded in the pooling process; how allocation decisions are made; and whether there are systems of accountability built in to produce a risk allocation scheme that is equitable, efficient, and flexible in determining how and to whom various kinds of risk are apportioned. Calling the system for what it is, and how it actually operates, is the most honest way to address the underlying values.

Simply establishing a risk-centered normative frame will not, of course, resolve the tensions. Risk talk can cut both ways. It is highly elastic, capable of framing normative issues around invocations of both solidarity and short-term self-interest. But governance structures based in risk pools would provide a framework through which advocates of greater equity could make their claims.

 
IV.
Conclusion

Mechanisms governing and distributing financial risk are what drive the health care system today.  The system’s viability is contingent on efficient risk allocation, but the inherent tensions and trade-offs between equity and efficiency in health care could be negotiated in a more open and democratic process. Such a venue is missing in the contemporary American health care system, both in the status quo and in proposals for reform. Regardless of whether health care financing mechanisms change in the future, increasing citizen engagement in the health care system will remain important. For something as central to our lives and our economy as the health system, we should interrogate much more vigorously than we have so far our conventional understanding of whether and how democratic norms and structures could provide mediating processes for risk-centered decision-making.dingbat

 

Acknowledgments:

Copyright © 2009 Georgetown Law Journal.

Nan. D. Hunter is Professor of Law at Brooklyn Law School.

This Editorial is based on the following full-length Article:   Nan D. Hunter, Risk Governance and Deliberative Democracy in Health Care, 97 GEO. L.J. 1 (2009). Click Here for the Full Version

  1. See JURGEN HABERMAS, BETWEEN FACTS AND NORMS: CONTRIBUTIONS TO A DISCOURSE THEORY OF LAW AND DEMOCRACY 360 (1995).
  2. See Michael H. Gottesman, In Despair, Starting Over: Imagining a Labor Law for Unorganized Workers, 69 CHI.-KENT L. REV. 59, 80 (1993).
  3. See CYNTHIA ESTLUND, WORKING TOGETHER: HOW WORKPLACE BONDS STRENGTHEN A DIVERSE DEMOCRACY 7-119 (2003).
  4. See Deborah A. Stone, Beyond Moral Hazard: Insurance as Moral Opportunity, 6 CONN. INS. L.J. 11, 16, 21 (1999).
  5. Joshua Cohen, Democracy and Liberty, in DELIBERATIVE DEMOCRACY 185, 193 (Jon Elster ed., 1998).

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