Litigation and access to healthcare: an analysis of universal coverage and judges’ decision making criteria

Monge-Navarro, Daniela and Monge, Andrea N (2023): Litigation and access to healthcare: an analysis of universal coverage and judges’ decision making criteria.

Abstract

Public insurers face trade-offs between the individual and collective benefits they can provide given limited resources. Drug expenditure is one of the largest components of health spending and it is not clear cut what should be readily available. We study litigation as a safety valve using data from cancer drug requests filed in court in Costa Rica, a country with a universal healthcare system. As a standard, decisions on rationing are based on economic evaluations of health care, but a probit model to predict lawsuit success shows that higher benefit drugs do not have higher success probabilities even if this would be the desired outcome from the individual’s perspective. Marginal costs, which approximate cost-benefit ratios, do show a significant effect but of a smaller magnitude, making the Court differ from the public insurer’s rationing rule. Regarding social determinants of health, variables such as education, income and region don’t appear to generate a bias from judges. Moreover, as prevalence and mortality are commonly used to characterize diseases and their severity, we examine the types of cancers involved in litigation and assess whether healthcare coverage explains any patterns. Overall, no clear patterns emerge, indicating that the Court’s role in drug access complements the population-level rationing rules, addressing individual heterogeneity. For judges, the findings do not suggest a cautious approach for prevalent diseases, but they do place a high value on the probability of survival. So far this last factor appears the most relevant for Court rulings. Finally, an event study model shows that no drug or diagnosis guarantees lawsuit success, and past decisions do not significantly influence future ones, which is a common concern according to public opinion. This research sheds light on the complex decision-making process regarding drug access under a universal healthcare system and highlights the importance of balancing individual and collective well-being in resource allocation.

• Item Type: MPRA Paper
• Language: English
• Keywords: litigation, healthcare, drug-access, cost-effectiveness, prevalence, mortality
• Subjects: D - Microeconomics > D6 - Welfare Economics > D61 - Allocative Efficiency ; Cost-Benefit Analysis; H - Public Economics > H4 - Publicly Provided Goods > H40 - General; I - Health, Education, and Welfare > I1 - Health > I11 - Analysis of Health Care Markets; I - Health, Education, and Welfare > I1 - Health > I13 - Health Insurance, Public and Private; I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy ; Regulation ; Public Health; K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K41 - Litigation Process

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