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What does Hobby Lobby ruling mean for healthcare, separation of church and state?

July 2nd, 2014

by Jonathan H. Burroughs

The narrow 5-4 Supreme Court decision of Burwell v. Hobby Lobby is a significant event. Five Supreme Court justices (in an opinion written by Justice Samuel Alito) sided with closely held corporations (a corporation where five or fewer shareholders own at least 50 percent of the company). The ruling gave them the legal right to opt out of the Patient Protection and Affordable Care Act's mandate to provide coverage for birth control assistance to employees on the basis of religious objection.

This is a significant decision as it is the first time that the high court has provided this right to nonreligious for profit entities. Up until this point, religious affiliated organizations or churches were exempt from providing care that violated religious values and beliefs; small employers with less than 50 employees were exempt from providing healthcare insurance at all.

Why is this decision so important? As emphasized by the minority opinion written by Justice Ruth Bader Ginsburg, there are thousands of closely held corporations in the United States: In-N-Out Burger and Forever 21 that could opt out of many laws for religious objections and the Supreme Court offers no guidance as to the limits covered.

In addition, there is an access issue for millions of women who rely on healthcare coverage to pay the average cost of $45 for emergency contraception (which 20 percent of pharmacies do not offer according to the New York Times) or of $1,000 for an IUD. This is contrary to the Institute of Medicine report last year that supported the Affordable Care Act's mandate for preventative healthcare services including "a fuller range of contraceptive education, counseling, methods, and services so that women can better avoid unwanted pregnancies and space their pregnancies to promote optimal birth outcomes."


Interestingly, the Supreme Court decision is contrary to a majority opinion, according to a Kaiser Foundation. Many felt that "employers should be required to cover birth control regardless of whether it violates the owners' religious beliefs."

Obviously, advocates for religious freedom laud the decision while members of the Obama administration vow to pass legislation to work around the exemption so that employees may receive healthcare coverage for comprehensive preventive health services.

What fundamental healthcare issues does this important case bring out?

  1. Most industrialized healthcare systems do not pit employer against employee with respect to personal religious values and beliefs. The United States has a unique employer based healthcare system with tax exemptions and defined benefit/contribution plans for its employees. Thus, employer chooses insurance coverage and federal and state governments regulate it. This is an unusual approach as it creates the opportunity for employers to make faith/value-based decisions that may conflict with the faith/values of its employees.
  2. Most healthcare systems emphasize preventive healthcare services and not the care of acute medical and surgical emergencies. Most prospective or capitated healthcare systems incentivize healthcare organizations and practitioners to keep people well and not to provide non-value added diagnostic or therapeutic services. Thus, preventive healthcare is considered the foundation for good care and few industrialized nations deny its citizens access to care that has both the potential to reduce the cost of care for payers/employers and can add quality of life to those who contribute to the economic well being of their nation. The United States mandates the obligatory provision of stabilization for acute emergency medical conditions under EMTALA, but does not require the provision of preventive care that could save payers billions per year and add years of quality to life.
  3. Most industrialized nations provide universal healthcare coverage for basic and preventive healthcare services. The United States is one of three industrialized nations that does not offer some form of universal healthcare coverage for fundamental and preventive healthcare services (the other two are Mexico and Turkey). This is self-defeating as it leads to cost shifting to everyone who can afford to pay which artificially drives up the cost of care and reduces access to care for whom it is most needed.
  4. Most industrialized healthcare systems incentivize practitioners to prevent disease and not merely to diagnose and treat it. Most industrialized nations incentivize practitioners based upon a capitated (covered lives/month) form of payment and thus there is significant economic incentive to not perform nonvalue added diagnostic and therapeutic treatments. Fee for service incentivizes the search for conditions that are amenable to some form of reimbursed treatment.

Burwell v. Hobby Lobby pits employers with sincere religious beliefs against employees who require preventive birth control healthcare services, and this is both unnecessary and inappropriate as an individual's religious values should be both personal and private. This case highlights the necessity to provide fundamental preventive and palliative services to all citizens so that neither employers nor employees are placed in a position to place personal values over the healthcare needs and personal beliefs of others.

Jonathan H. Burroughs, M.D., is president and CEO of The Burroughs Healthcare Consulting Network. He's also a certified physician executive and a fellow of the American College of Physician Executives and the American College of Healthcare Executives.


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