Monday, April 14, 2008
Bronsteen, Maher, and Stris on ERISA, Agency Costs, and the Future of Health Care in the United States
John Bronsteen (Loyola Chicago) (lerft), Brendan Maher (Stris & Maher), and Peter Stris (Whittier) have posted on SSRN their forthcoming work in the Fordham Law Review: ERISA, Agency Costs, and the Future of Health Care in the United States.
Here is the abstract:
Because so many Americans receive health insurance through their employers, the Employee Retirement Income Security Act of 1974 (ERISA) plays a dominant role in the delivery of healthcare in the United States. The ERISA system enables employers and insurers to save money by providing inadequate healthcare to employees, thereby creating incentives for these agents to act contrary to the interests of their principals. Such agency costs play a significant role in the current healthcare crisis and require attention when considering reform. We evaluate the two major healthcare reform movements by exploring the extent to which each reduces agency costs. We find that agency cost analysis clarifies the benefits, limits, and uncertainties of each approach.
Interesting stuff. Looking forward to seeing the health care debate through this new agency cost lens. Some might recall that Peter argued the LaRue case for the employee-plaintiff.