Health Care Cost Containment Experiments: Policy, Individual Rights, and the Law

In a climate of increasing pressure to contain health care costs. legislators and health services researchers from time to time have proposed experiments involving reductions in benefits currently authorized under the Medicare and Medicaid programs. This paper examines three court challenges to the conduct of such experiments in California, New York, and Georgia. The rulings on the California and New York cases were in favor of continuing the experiments on the grounds that the Secretary of Health, Education, and Welfare had judged the projects to be helpful in promoting the objectives of Titles XIX and IV-A, respectively, of the Social Security Act. In the Georgia case, however, the plaintiffs contended that federal regulations protecting human subjects were applicable to the experiment at issue. While the precedent of past cases upholding the Secretary's authority to approve benefit-reducing experiments was not overturned in Georgia, the Court held that the human subjects regulations were applicable and, consequently, that such experiments must be reviewed prior to implementation by an Institutional Review Board. If the experiment places human subjects at risk, the regulations require that informed consent be obtained from participating subjects. The paper concludes by examining the implications of the Georgia ruling in terms of future efforts to contain health care costs while ensuring that the rights of individual beneficiaries are adequately safeguarded.