In Defense of Circular Reasoning: The Affordable Care Act and the Resilience of Law and Self-Reference

5 William & Mary Pol'y Rev. 1 (2014)

49 Pages Posted: 9 Dec 2014

Date Written: December 8, 2014

Abstract

This paper looks at circular, self-referential phenomena in the health system as a means of understanding the functions circularity may serve, and how law, itself a self-referential system, interacts with social ordering of a circular nature.

This article examines two examples of circular decisions in the health system and two corresponding provisions of a particular U.S. legal regime that addresses these recursive patterns, namely, the Affordable Care Act of 2010 (ACA). First, treatment decisions, as held to the negligence standard of care exemplify circular self-regulation, and the comparative effectiveness research provisions enacted in the ACA seek to affect these decisions. Second, adverse selection and risk segmentation, which characterize the decisions to buy and sell health insurance, are circular phenomena, trapping the market in a suboptimal equilibrium, a condition that the ACA’s individual mandate aims to rectify.

In Part I, I use the notion of “autopoiesis” and other systems theory concepts elaborated by German lawyer and sociologist Niklas Luhmann to describe the function of self-reference in both treatment decisions and in insurance purchase transactions. Circularity, in this account, helps us, as social creatures, cope with the ultimate lack of grounding for complex, high-stakes decisions involving significant uncertainty. Through self-referential processes, we can diffuse responsibility for these decisions by generating mutually understood expectations that are not attributable to any one source. The circular process of developing such expectations masks and relieves our anxiety about the lack of external grounding for those decisions. Evidence, while helpful to a treating physician, is always indeterminate when applied to an individual patient, and decisions about whether to insure or not depend on the ultimate unknowability of whether someone will incur significant medical costs in the future. Yet circularity enables us to make such decisions routinely and with relative stability.

In Part II, I argue that the interaction of each of these two self-referential phenomena with their corresponding legal provision in the ACA yields a counternarrative to that animating the popular hostility to health reform, but also to certain strands of legal scholarship suggesting that the law of the post-New Deal modern regulatory state -- with which health reform has been associated -- must be fundamentally reconsidered to deal with the complex social landscape of our times. State regulation, even ambitious regulation, such as that embodied in the ACA, is not, as some would suggest, as incompatible with circularity, the token of our complex and contingent world.

Keywords: health reform, systems theory, ACA, new governance

JEL Classification: K32, I18

Suggested Citation

Ho, Christina S., In Defense of Circular Reasoning: The Affordable Care Act and the Resilience of Law and Self-Reference (December 8, 2014). 5 William & Mary Pol'y Rev. 1 (2014), Available at SSRN: https://ssrn.com/abstract=2535476 or http://dx.doi.org/10.2139/ssrn.2535476

Christina S. Ho (Contact Author)

Rutgers Law School ( email )

Newark, NJ
United States

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