Holding health care accountable : law and the new medical marketplace

337 Pages·2001·20.77 MB·English

by  Morreim

HOLDING
HEALTH CARE
ACCOUNTABLE
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HOLDING
HEALTH CARE
ACCOUNTABLE
Law and the New
Medical Marketplace
E. Haavi Morreim
OXTORD
UNIVERSITY PRESS
2001
OXFORD
UNIVERSITY PRESS
Oxford New York
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and associated companies in
Berlin Ibadan
Copyright © 2001 by Oxford University Press.
Published by Oxford University Press, Inc.,
198 Madison Avenue, New York, New York, 10016
http://www.oup-usa.org
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted, in any form or by any means,
electronic, mechanical, photocopying, recording, or otherwise,
without the prior permission of Oxford University Press.
Library of Congress Cataloging-in-Publication Data
Morreim, E. Haavi.
Holding health care accountable : law and the new medical marketplace /
E. Haavi Morreim.
p. cm. Includes bibliographical references and index.
ISBN 0-19-514132-6
1. Managed care plans (Medical care)—Law and legislation—United States.
2. Liability (Law)—United States.
3. Physicians—Malpractice—United States.
I. Title.
KF1183.M672001 344.73 '0411—dc21 00-054846
98765432 1
Printed in the United States of America
on acid-free paper
in loving memory of Florence, my mother
with all my love to Paul, my father
with special love for Janet,
the newest member of our family
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PREFACE
For the past twenty years I have watched, with a mixture of fascination, conster-
nation, and bemusement, the enormous changes sweeping health care. A broad
economic upheaval has precipitated a far-reaching reorganization of health care de-
livery that, in the process, is quite literally rewriting medicine. After nearly a half-
century of lavish third-party payment for virtually anything a physician chose to
order, businesses and governments finally began to enforce serious cost containment
in the late 1980s and early 1990s. From well-funded norms of "if it might help and
probably won't harm, do it" and "too much is better than too little," clinical medi-
cine is now expected to embody "less is more" and "if you can't show it will help
the patient, don't do it." The transition has been tumultuous for providers, patients,
payers, and health plans alike. And it is hardly finished.
Another wrinkle confuses the picture even further. The tort and contract doctrines
by which the law traditionally holds providers and health plans accountable for the
quality and quantity of care they deliver have not kept pace with medicine's eco-
nomic and clinical overhaul. Those legal obligations were shaped largely during an
era of affluence, in which the providers who transformed scientific discoveries into
clinical miracles rarely, if ever, needed to worry about the cost of providing them
to patients. Accordingly, neither did courts worry. Courts have expected providers to
deliver the same basic standard of care to everyone—a standard that has come to
incorporate costly technologies—regardless of the patient's ability to pay.
In recent years, as those free-flowing reimbursements came to a screeching halt,
the realities of what can be delivered no longer match the limitless demands. The
vii
viii Preface
new economic constraints have provoked a variety of coping mechanisms. Some of
them have been salutary, as when physicians and health plans carefully reevaluate
which kinds of care really help patients and which do not. Others are less benign, as
when plans impose utilization review hurdles that delay or deny needed care, or
when physicians refuse to care for patients who lack adequate insurance. Many
patients, long invited to expect a medical miracle for every ailment, now face perva-
sive restrictions on providers and treatments, with procedural obstacles at every
turn.
More to the point for this book, when legal expectations based on yesterday's
flush economics clash with current financial finitude, some disturbing scenarios
arise. Physicians stand to be held personally liable for limits on care that are im-
posed by third parties. And on the other side, courts often expect health plans to
provide each patient with unstinting care, regardless of the implication that they
must then do the same for an entire population within increasingly stringent fiscal
constraints.
These tensions between legal traditions and economic realities have prompted
some unhealthy responses. Increasingly, providers and plans feel forced to resort to
subterfuge. Unwilling to risk saying aloud that "this intervention may have some
value, but it isn't worth the money," health plans instead are more likely to declare
the intervention "not medically necessary," as if the decision were dictated purely
by science, and patients denied this care were not being deprived of anything impor-
tant. Physicians, laboring under abrasive restrictions on their clinical autonomy and
under fears about being forced to treat patients inadequately, increasingly resort to
duplicity in order to deliver the care—and receive the payment—they think appro-
priate. So long as law demands a level of care that is no longer economically
sustainable nor always medically desirable, the cycles of gamesmanship are likely
to continue. And so long as that happens, we are impeded from determining, as
openly and constructively as we should, what sorts of health care merit our invest-
ment as a society and as individuals.
I began writing nearly two decades ago about this tension between law's expecta-
tions and medicine's changing economics, building since then a fairly comprehen-
sive body of thought through a variety of articles in law reviews and other publica-
tions. As society debates ever more intensely whether and in what ways plans and
providers should be liable for the medical consequences of their cost-cutting, it
seems propitious to collect some of the ideas in those works, scattered across time
and venues, into a single volume. However, this book is not a collection of articles.
Rather, it gathers, integrates, updates, enriches, and expands the ideas found in those
works, knitting them together into a single, coherent whole that is, I believe, consid-
erably greater than the sum of its parts.
Although a detailed preview is provided in Chapter 1, a brief overview might be
useful here. Part I explains how medicine's economic upheaval has precipitated far-
reaching changes in the ways health care is organized and clinical medicine is prac-
ticed. Part I then considers the conflicts that traditional legal doctrines create for
physicians facing tort liability and for health plans facing both tort and contract
liability.
Preface ix
Part II examines several proposals for bringing legal doctrines into harmony with
changing medical economics and, finding them to be wanting, offers an alternative.
A coherent, defensible approach to apportioning legal liability between physicians
and health plans must begin not with the question of which party we want to hold
liable for what sorts of adverse outcome, but rather with that of how best to achieve
high-quality health care. Those who bear potential liability often feel impelled to
exert control over the factors that can precipitate such liability, after all, and if we
do not want a particular party, such as an HMO, to control a given aspect of health
care, then we should not hold that HMO legally liable for adverse outcomes in that
realm. As this book will propose, physicians are better suited to control some as-
pects of care, while plans are better suited to manage others. Under such a quality-
oriented division of labor, each party should then face liability only for those as-
pects of care that it could and should have controlled.
Part II also proposes another distinction. High-quality health care often requires
costly technologies, and a lack of funding often translates into a lack of care. Nev-
ertheless, poor quality of care is not always the result of constraints on fiscal and
physical resources. Good care also requires mental skills and personal diligence—
knowledge, judgement, skill, and effort. Thus, it is important to distinguish between
"resource" issues and matters of "expertise."
Within this distinction, physicians have obvious duties of expertise, but they also
can have obligations regarding resources, particularly when they bear financial risk
for the costs of the care they provide. Reciprocally, while health plans have obvious
duties regarding resources, they can also have expertise duties, such as to exercise
diligence and good judgment in their activities of business administration and qual-
ity surveillance. Part II proposes that resource duties, whether for plans or physi-
cians, should be litigated through contract law, while duties of expertise should be
examined in tort.
Finally, Part III shows that although familiar legal doctrines seem ill-equipped to
address all of medicine's economic changes, and although this book's approach is
novel in many respects, in fact the changes proposed here can be accommodated
quite nicely within the most fundamental traditions underlying tort and contract law.
As an added advantage, the expertise/resource distinction can improve the law in
other areas, particularly by clarifying and enhancing courts' management of difficult
issues currently litigated under the Employee Retirement Income Security Act
(ERISA).
In sum, health law is currently lagging a bit behind the extraordinary economic
changes reshaping health care. Though daunting, the situation presents important
opportunities. Although the legal system must stand as a guardian to ensure
accountability through this difficult transition, it need not cause obstruction and
confusion. Rather, if undergirded by a thoughtful reconception of what society
should rightly expect from its providers and its health plans, the law of tort and
contract should actually be able to clarify, and even ease, that transition. This book
aims to point the way.
Memphis, Tennessee E. H. M.