Paying for what you get and getting what you pay for: Legal responses to consumer-driven health care

Law and Contemporary Problems

Volumn 69, Issue 4, 2006, Pages 159-180

  Hall, Mark A ^a  

^a WAKE FOREST SCHOOL OF MEDICINE   (United States)

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EID: 33947401052     PISSN: 00239186     EISSN: None     Source Type: Journal    
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References (182)

1. Clark C. Havighurst & Barak D. Richman, Distributive Injustice(s) In American Health Care, 69 Law & Contemp. Probs. 7, 8 (Autumn 2006).
2. See generally Consumer-Driven Health Care: Implications for Providers, Payers and Policy Makers (Regina E. Herzlinger ed., 2004) (providing extensive overview of consumer-driven health care policies);
3. James C. Robinson, Reinvention of Health Insurance in the Consumer Era, 291 JAMA 1880 (2004) (same);
4. Amy B. Monahan, The Promise and Peril of Ownership Society Health Care Policy, 80 Tul. L. Rev. 777 (2006) (analyzing the claims made by proponents of consumer-driven health care).
5. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 § 1201, 26 U.S.C.A. § 223 (2003).
6. Richard L. Kaplan, Who's Afraid of Personal Responsibility? Health Savings Accounts and the Future of American Health Care, 36 McGeorge L. Rev. 536, 551-52 (2005);
7. Edward J. Larson & Marc Dettmann, The Impact of HSAs on Health Care Reform: Preliminary Results After One Year, 40 Wake Forest L. Rev. 1087, 1097 (2006). These numbers are not precise because they are adjusted each year for inflation.
8. See Havighurst & Richman, supra note 1, at 79 (supporting "proposals to let consumers... choose more or less freely the style of health care they want to purchase for their families"). To the surprise of many, they are also amenable to a single-payer government insurance system.
9. See id. ("Indeed, we would not object if our [arguments]... were cited as a reason to adopt a monolithic national health program."). Still, they insist that those who are well-off remain free to purchase supplemental coverage that provides a higher tier of service.
10. See id. (expressing openness to "scrapping private health insurance altogether (except insofar as it might supplement the national system's coverage)").
11. Others in this symposium consider public insurance and government regulation of providers. See, e.g., Christopher J. Conover, Distributional Considerations in the Overregulation of Health Professionals, Health Facilities, and Health Plans, 69 Law & Contemp. Probs. 181 (Autumn 2006);
12. Jonathan Oberlander, The Political Economy of Unfairness in U.S. Health Policy, 69 Law & Contemp. Probs. 245 (Autumn 2006).
13. Havighurst & Richman, supra note 1, at 28.
14. Id.
15. Christopher P. Tompkins, Stuart H. Altman & Efrat Eilat, The Precarious Pricing System for Hospital Services, 25 Health Aff. 45, 52 (2006).
16. Kenneth T. Bowden, Determining a Reasonable Price for Health Care in the United States: Is This Possible?, 34 Brief 26, 28 (2005);
17. Uwe E. Reinhardt, The Pricing of U.S. Hospital Services: Chaos Behind a Veil of Secrecy, 25 Health Aff. 57, 62 (2006);
18. Julie Appleby, Hospitals Sock Uninsured with Much Bigger Bills, USA Today, Feb. 25, 2004, at B1;
19. Lucette Lagnado, Anatomy of a Hospital Bill, Wall St. J., Sept. 21, 2004, at B1.
20. Havighurst & Richman, supra note 1, at 13-82. These factors include the following: (1) the charitable mission of most nonprofit hospitals, which encourages them to support various collective goods, (2) the ability of public and private insurers to insist on deep discounts that eliminate pricing support for collective goods, and (3) hospitals' market power over the uninsured. Also relevant are regulatory barriers to hospitals regularly offering non-negotiated price discounts.
21. See id. at 71-72.
22. Id. at 72.
23. For instance, federal courts have refused to certify a class, have found an absence of any federal cause of action, or have declined supplemental jurisdiction over state-law breach-of-contract claims. Moreover, courts have dismissed some contract claims on res judicata grounds when the claim was previously settled through normal collection processes. Richard G. Stuhan, Decisions to Date on Dispositive Motions in the Charity Care Litigation, Health Lawyer News, Sept. 2005, at 18.
24. Id.
25. Temple Univ. Hosp. v. Healthcare Management Alternatives, 832 A.2d 501, 508 (Pa. Super. Ct. 2003);
26. River Park Hosp. v. Bluecross Blueshield of Tenn., 173 S.W.3d 43, 58 (Tenn. 2003).
27. Bowden, supra note 10, at 29;
28. Reinhardt, supra note 10, at 62;
29. Tomkins, Altman & Eilat, supra note 9, at 53.
30. Enacted about 2030 B. C., the Code of Hammurabi declared, for instance: If a doctor has cured the shattered limb of a gentleman or has cured the diseased bowel, the patient shall give five shekels of silver to the doctor. If it is the son of a poor man he shall give three shekels of silver. If a gentleman's servant, the master of the slave shall give two shekels of silver to the doctor. Hubert W. Smith, Legal Responsibility for Medical Malpractice, 116 JAMA 942, 943 (1941). It is not entirely clear, though, whether these rules were based on ability to pay rather than on the social value of the service to different classes of patients.
31. The historical and legal bases for barring physicians from suing for fees has not been studied as thoroughly as it has been for lawyers. For physicians, the best scholarly discussion is well over a century old. John Ordronaux, The Jurisprudence of Medicine in its Relations to the Law of Contracts, Torts, and Evidende 10-14, 34-41 (Arno Press 1973) (1869).
32. It appears that medieval Roman law codified the ancient practice based in part on concerns that physicians were overcharging their patients. Thomas Percival, Medical Ethics: Or a Code of Institutes and Precepts Adapted to the Professional Conduct of Physicians and Surgeons 175-76 (Birmingham: Classics of Medicine 1985) (1803).
33. In Renaissance England, the rule appears to be based more on the notion of legal recognition of professional norms, that is, refusing to find an implied promise to pay when the common practice at the time was to receive honoraria. However, it seems there was no rule barring physicians from making and enforcing an express contract. Id. at 177-78;
34. Rondel v. Worsley, [1969] 1 A.C. 191, 237 (Lord Morris), 280 (Lord Upjohn) (H.L. 1967) (appeal taken from Eng.), overruled by Arthur J.S. Hall & Co. v. Simons, (2002) 3 Eng. Rep. 673 (H.L.) (appeal taken from Scot.).
35. In ancient Rome, lawyers and other "liberal arts" practitioners from the nobility undertook service pursuant to a "mandate," meaning that their services were required without compensation. This understanding arose from the social order among the Roman nobility that regarded public service as one of the duties of citizenship and that assumed that other nobles would reciprocate in kind with their services, as the need arose. See Barry Nicholas, An Introduction to Roman Law 187-89 (1962);
36. Roscoe Pound, The Lawyer from Antiquity to Modern Times 51-55 (1953);
37. Reinhard Zimmerman, The Law of Obligations: Roman Foundations of the Civilian Tradition 413-20 (1996). British barristers adopted the convention of voluntary honoraria rather than contractual fees, in part in order to elevate their social and professional standing over solicitors and attorneys.
38. J.H. Baker, The Legal Profession and the Common Law: Historical Essays 119 (1986).
39. These legal characterizations were largely just formalities, however, in that both in England and in ancient Rome, lawyers usually expected to receive their standard payment before they took a case. Also, they sometimes could sue for payment on legal grounds other than ordinary contract, such as quantum meruit (equity) or to enforce a sealed bond given in exchange for service. Id.
40. Thomas Percival, for instance, in his seminal Medical Ethics, carefully refers to physicians' payments as "pecuniary acknowledgements" rather than as fees, charges, or the like. Percival, supra note 19, at 39-40, 174-79.
41. Lawyers never fully adopted this part of the creed. Instead, the practice among barristers was to insist on payment of their usual fee in advance, before taking on a case. Only in criminal cases were barristers required to work without pay. This prepayment practice obviated the need to sue for fees, which legal historians speculate made it convenient for barristers to adopt the non-enforceability doctrine as a means of elevating their professional standing. Later, barristers used the noncontractual basis of legal services to argue for immunity from tort liability. See Rondel v. Worsley, [1969] 1 A.C. 191 (H.L. 1967) (appeal taken from Eng.), overruled by Arthur J.S. Hall & Co. v. Simons, (2000) 3 Eng. Rep. 673 (H.L.) (appeal taken from Scot.).
42. Kenneth Allen DeVille, Medical Malpractice in Nineteenth-Century America 184 (1990);
43. Ordronaux, supra note 19.
44. D.E. Evins, Annotation, Ability to Pay as Factor in Determining Reasonableness of Charge of Physician or Surgeon, 97 A.L.R.2d 1232 (1964).
45. See, e.g., Zumwalt v. Schwarz, 297 P. 608, 610 (Cal. Ct. App. 1931) ("[T]here is evidence of a recognized usage, which has grown into a custom, to graduate professional charges with reference to the financial condition of the patient...."). One widespread practice was to charge the patient one month of his or her salary for a major operation.
46. Houda v. McDonald, 294 P. 249, 251 (Wash. 1930).
47. For instance, Citron v. Fields, 85 P.2d 534 (Cal. Ct. App. 1938), was a suit against the famous actor W.C. Fields for $12,000 in medical fees.
48. Although courts have not specifically repudiated the rule that considers patients' ability to pay, the last reported case following this principle is Spencer v. West, 126 So. 2d 423, 426-27 (La. Ct. App. 1960).
49. The principle was briefly mentioned in one unreported case since then. Anticaglia v. Lynch, No. 90C-11-175, 1992 WL 138983, at *19 (Del. Super. Ct. Mar. 16, 1992).
50. Most modern cases simply state that patients owe reasonable rates based on prevailing charges. E.g., Rush Presbyterian-St. Luke's Med. Ctr. v. Hellenic Republic, 980 F.2d 449, 453-54 (7th Cir. 1992).
51. See, e.g., American Medical Association Council on Ethical and Judicial Affairs, Code of Medical Ethics: Current Opinions with Annotations Op. 8.055 (2005) ("Physicians have a professional obligation to provide care to those in need, regardless of ability to pay, particularly to those in need of urgent care.");
52. id Op. 9.065 ("Each physician has an obligation to share in providing care to the indigent.... Caring for the poor should be a regular part of the physician's practice schedule.").
53. Havighurst & Richman, supra note 1, at 42.
54. Id at 45-46.
55. Id at 46-47.
56. Id. at 47-49.
57. See Deborah Stone, The Struggle for the Soul of Health Insurance, 18 J. Health Pol. Pol'y & L. 287 (1993) (stressing the social value of community rating).
58. See Mark A. Hall, Reforming Private Health Insurance 62-76 (1994).
59. "Medical underwriting" means that insurers in some fashion assess and price the health risk of each subscriber. Id at 16-17.
60. Mark A. Hall, The Geography of Health Insurance Regulation: A Guide to Identifying, Exploiting, and Policing Market Boundaries, Health Aff., Mar.-Apr. 2000, at 173, 173.
61. John D. Graham et al., Poorer is Riskier, 12 Risk Analysis 333, 334 (1992);
62. Paula M. Lantz et al., Socioeconomic Factors, Health Behaviors, and Mortality: Results from a Nationally Representative Prospective Study of U.S. Adults, 279 JAMA 1703-08 (1998).
63. Another possible explanation is that lower-income people are less likely to purchase insurance, so insurers may consider that it is not worthwhile to add that factor into an already-complex rating formula.
64. Insurance pricing is regulated by state, not federal, law. State law regulates small-group insurance rating in much greater detail than the rating of individual ("non-group") insurance. See Mark A. Hall, The Structure and Enforcement of Health Insurance Rating Reforms, 37 Inquiry 376, 376-77 (2001) (describing rating rules and practices for the small-group and individual markets).
65. See Mark A. Hall, The Political Economics of Health Insurance Market Reform, Health Aff., Summer 1992, at 108, 119 (discussing the insurance industry's influence over market reforms).
66. See Havighurst & Richman, supra note 1, at 49.
67. See id.
68. Id. at 45.
69. Id. at 38 n.94.
70. Timothy S. Jost & Mark A. Hall, The Role of State Regulation in Consumer-Driven Health Care, 31 Am. J.L. & Med. 395, 413-14 (2005).
71. Id.
72. See Mark V. Pauly, Health Benefits At Work: An Economic and Political Analysis of Employment-Based Health Insurance 86-91 (1997) (detailing the use of community rating in allocating health insurance costs);
73. W.E. Encinosa & T.M. Selden, Designing Employer Health Benefits for a Heterogeneous Workforce: Risk Adjustment and Its Alternatives, 38 Inquiry 270 (2001) (describing various options for employers to allocate health care costs among employees).
74. As surveyed in Henry Greely, The Regulation of Private Health Insurance, in Health Care Corporate Law: Formation and Regulation 8-1 (Mark Hall ed., 1993), federal law preempts much of this arena from state regulatory oversight and asserts little direct substantive regulation of its own. Employers' decisions to offer fringe benefits are affected indirectly by federal tax law, but tax law does not require employers to provide equal benefits to all workers. Instead, unless they self-insure, employers may favor some employees over others.
75. Richard Schmalbeck & Lawrence Zelenak, Federal Income Taxation 125-29 (2004).
76. As Havighurst and Richman discuss, economists argue that workers effectively pay for all premium costs through reduced wages, because total payroll costs are constrained by market forces, and employers are economically agnostic as to whether payroll expenses are paid in the form of wages or benefits. Havighurst & Richman, supra note 1, at 44-45. Therefore, it largely does not matter how much of compensation goes toward health insurance. This argument is most convincing, however, only for aggregate payroll costs. The economic effects of allocating these costs among classes of employees remain more speculative. As Havighurst and Richman argue, it remains unproven whether having lower costs for the health benefits of one subset of workers would result in higher wages for those workers or whether the opposite would be true.
77. Id at 46. For instance, employers generally do not pay some equally qualified workers more simply because they elect not to receive health benefits. Therefore, it is relevant to focus on the portion of premiums charged explicitly to workers.
78. See Thomas Rice & Kenneth E. Thorpe, Income-Related Cost Sharing in Health Insurance, Health Aff., Spring 1993, at 21, 21 (recommending that employers tie cost-sharing to employees' income level);
79. see also Veronica Goff, Consumer Cost Sharing in Private Health Insurance: On the Threshold of Change, Nat'l Health Pol'y Forum Issue Brief, May 2004, at 8, available at http://www.nhpf.org/pdfs_ib/ IB798_CostSharing.pdf;
80. Sally Trude & Joy M. Grossman, Patient Cost-Sharing Innovations: Promises and Pitfalls, Ctr. for Studying Health Sys. Change Issue Brief, Jan. 2004, at 3, available at http://www.hschange.org/CONTENT/643/.
81. Gary Claxton et al., What High-Deductible Plans Look Like: Findings from a National Survey of Employers, 2005 Helath Aff. (Web Exclusives) W5-434, W-439.
82. 26 U.S.C.A. § 4980G (2003);
83. U.S. Dep't of the Treasury, HSA Frequently Asked Questions, http://www.ustreas.gov/offices/public-affairs/hsa/faq_basics.shtml (last visited Mar. 6, 2006).
84. Recently, President Bush proposed allowing employers to make higher contributions to the HSAs of chronically ill employees. Press Release, White House Office of the Press Sec'y, State of the Union: Affordable and Accessible Health Care (Jan. 31, 2006), available at http://www.whitehouse.gov/news/releases/2006/01/20060131-7.html. This proposal does not include different contributions based on income, however. Currently, this can be done only through a "section 125 cafeteria plan," also known as a flexible spending account.
85. See U.S. Dep't of the Treasury, supra note 52.
86. See U.S. Dep't of the Treasury, supra note 52. This would comply with requirements for HSAs so long as the lowest deductible meets the HSA floor. For example, employers could give low-wage workers coverage with a $1000 deductible while giving high-wage workers coverage with a $5000 deductible - each group being charged the same amount for their coverage. The only constraint set by HSA law is that if the employer contributes to the HSA, it must contribute equal amounts for each employee and no more than the deductible amount.
87. See supra text accompanying note 52. Therefore, under this example, employers could fund only one-fifth of the deductible for higher-wage workers.
88. The most notable example is the nondiscrimination requirement for employer contributions to HSAs, which poses a regulatory barrier to implementing these new benefit structures in a way that does not overburden lower-income workers.
89. Havighurst & Richman, supra note 1, at 58-71.
90. Id. at 66.
91. See generally Clark C. Havighurst, Is the Health Care Revolution Finished? - A Foreword, 65 Law & Contemp. Probs. 1 (Autumn 2002) (introducing this symposium discussing the failed potential of managed care).
92. Naturally, it is possible that managed care failed to drive substantial change because law was not more conducive to change, but most observers believe that managed care's failures were market-driven or were related to federal tax policy. See Mark A. Hall, The Death of Managed Care: A Regulatory Autopsy, 30 J. Health Pol. Pol'y & L. 427 (2005) (detailing the reasons for the downfall of managed care).
93. Therefore, the extent of legal resistance was never seriously tested in many arenas. See generally Peter D. Jacobson, Strangers in the Night: Law and Medicine in the Managed Care Era (2002) (analyzing legal responses to various aspects of managed care).
94. See text accompanying supra notes 2-4.
95. Havighurst & Richman, supra note 1, at 63.
96. See generally Randall R. Bovbjerg et al., U.S. Health Care Coverage and Costs: Historical Development and Choices for the 1990s, 21 J.L., Med., & Ethics 141 (1993).
97. See Mark A. Hall & Clark C. Havighurst, Reviving Managed Care with Health Savings Accounts, 24 Health Aff. 1490, 1491 (2005) (documenting the highly skewed distribution of health care spending that produces this phenomenon).
98. It is also the case, however, that most medical expenditures will still be insured. This apparent paradox is explained by the fact that the minority of people who exceed their deductible will have medical costs far above average, due to the highly-skewed distribution of medical problems across the population. Id. at 1494.
99. See sources cited supra notes 2-4.
100. E.g., Clark C. Havighurst, Health Care Choices: Private Contracts as Instruments of Health Reform 89-110 (1995);
101. Mark A. Hall & Gerard F. Anderson, Health Insurers' Assessment of Medical Necessity, 140 U. Pa. L. Rev. 1637 (1992). Although this failure to innovate may be due in significant part to regulatory barriers, it may also be due in large part to the important jurisprudential, relational, and expressive functions served by the standard medical-necessity concept.
102. See Kathy Cerminara, Dealing with Dying: How Insurers Can Help Patients Seeking Last-Chance Therapies (Even when the Answer Is "No"), 15 Health Matrix 285 (2005);
103. William M. Sage, Managed Care's Crimea: Medical Necessity, Therapeutic Benefit, and the Goals of Administrative Process in Health Insurance, 53 Duke L.J. 597, 600-45 (2003). Health insurance contracts cover complex professional judgments made in an almost infinite array of uncertain circumstances. Therefore, they partake heavily of "relational contracting" features that are difficult or impossible to specify in advance. In general legal theory, one solution is to contract for a broad existing professional norm and to leave specification and application to largely noncontractual processes.
104. See Symposium, Relational Contract Theory: Unanswered Questions, 94 Nw. U. L. Rev. 737 (2000) (detailing various applications of relational contract theory). This solution has prevailed under many types of health insurance for half a century, and it is highly doubtful that consumer-driven insurance will suddenly cause a radical change.
105. Most of the points in this section regarding insurers apply as well to self-insured employers, to the extent they make their own coverage determinations or review those made for them by contracted insurance administrators.
106. These coverage denials will be less frequently appealed, however, because they will be for lower-cost treatments and because many patients will be able to pay for them in any event from their health savings accounts. Underscoring the latter point, the tax qualification of HSAs extends to a broad list of health-related expenditures, regardless of whether they meet the stricter definition of "medical necessity" in the accompanying insurance policy. See sources cited supra note 4.
107. Hall & Havighurst, supra note 63, at 1495.
108. Id.
109. For example, in Wickline v. State, the court reasoned: The stakes, the risks at issue, are much higher when a prospective cost containment review process is utilized than when a retrospective review process is used. A mistaken conclusion about medical necessity following retrospective review will result in the wrongful withholding of payment. An erroneous decision in a prospective review process, on the other hand, in practical consequences, results in the withholding of necessary care, potentially leading to a patient's permanent disability or death. 192 Cal. App. 3d 1630, 1634 (1986).
110. See Mark A. Hall, Teresa R. Smith, Michelle Naughton & Andrea Ebbers, Judicial Protection of Managed Care Consumers: An Empirical Study of Insurance Coverage Disputes, 26 Seton Hall L. Rev. 1055, 1063 (1996) (documenting legal factors in coverage disputes prior to widespread managed care).
111. See, e.g., Crossman v. Media Gen. Inc., 9 Fed. App'x 147, 151 (4th Cir. 2001) (finding no conflict of interest when the employer paid benefits from a dedicated trust fund);
112. Mers v. Marriott Int'l Group Accidental Death and Dismemberment Plan, 144 F.3d 1014, 1020 (7th Cir. 1998) (finding no conflict when the amount at stake is small compared to total assets available);
113. Mitchell v. Eastman Kodak Co., 113 F.3d 433, 437 n.4 (3d Cir. 1997) (finding no conflict of interest when the employer paid benefits from a dedicated trust fund);
114. Kotrosits v. GATX Corp. Non-Contributory Pension Plan for Salaried Employees, 970 F.2d 1165, 1173 (3d Cir. 1992) (ruling that a potential future benefit to the decisionmaker is not sufficient to create a conflict).
115. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 112 (1989).
116. See generally Kathryn J. Kennedy, Judicial Standard of Review in ERISA Benefit Claim Cases, 50 Am. U. L. Rev. 1083 (2001);
117. Peter A. Meyers, Discretionary Language, Conflicts of Interest, and Standard of Review for ERISA Disability Plans, 28 Seattle U. L. Rev. 925 (2005).
118. See Hall & Anderson, supra note 65.
119. See cases cited supra note 72.
120. See cases cited supra note 72.
121. See cases cited supra note 72.
122. See cases cited supra note 72.
123. Leading cases also include Pinto v. Reliance Standard Life Ins. Co., 214 F.3d 377, 383-84 (3d Cir. 2000)
124. and Brown v. Blue Cross & Blue Shield of Ala, 898 F.2d 1556, 1561-62 (11th Cir. 1990).
125. Alternatively, an insurer might deny coverage because a different type of effective treatment is available that is substantially less costly yet still expensive. If the alternative treatment still costs as much as the deductible, however, then the insurer would enjoy all the benefits of the denial, increasing its financial conflict of interest. It is for this reason that Clark Havighurst and I propose that insurers share some portion of the savings with the patient in such circumstances - for instance, by agreeing to pay for the more expensive option if the patient will pay half the difference in cost. See Hall & Havighurst, supra note 63, at 1498.
126. See cases cited supra note 72.
127. See cases cited supra note 72.
128. See cases cited supra note 72.
129. See cases cited supra note 72.
130. As explained earlier, this is true even though most treatment costs will still be covered by insurance because insurance will primarily cover the relatively fewer situations of "catastrophic" costs that exceed the high deductible, such as hospitalizations of more than just a few days. See supra note 4 and accompanying text.
131. As explained earlier, this is true even though most treatment costs will still be covered by insurance because insurance will primarily cover the relatively fewer situations of "catastrophic" costs that exceed the high deductible, such as hospitalizations of more than just a few days. See supra note 4 and accompanying text.
132. E.g., Hall & Anderson, supra note 65.
133. In other words, this analysis purposefully avoids the informed consent aspects of the issue, such as who should raise the question of cost in considering treatment options and how cost issues should be discussed between patient and physician. For analysis of this issue, see E. Haavi Morreim, High-Deductible Health Plans: New Twists on Old Challenges from Tort and Contract, 59 Vand. L. Rev. 1207 (2006).
134. This precise combination of legal and medical attributes may not be the most common scenario in which liability issues will arise under consumer-driven insurance, but this particular framing helps to focus squarely on the legal issues that are uniquely raised by this form of insurance. See also id. (framing and analyzing the issues similarly).
135. For older authorities, see Becker v. Janiski, 15 N.Y.S. 675, 677 (N.Y. Civ. Ct. 1891),
136. and Medical Malpractice in Nineteenth-Century America, DeVille, supra note 23, at 183.
137. For a modern analysis, see E. Haavi Morreim, Cost Containment and the Standard of Medical Care, 75 Cal. L. Rev. 1719, 1724-25 (1987),
138. and John A. Siliciano, Wealth, Equity, and the Unitary Medical Malpractice Standard, 77 Va. L. Rev. 439, 441 (1991).
139. Tunkl v. Regents of University of California, 383 P.2d 441, 448 (Cal. 1963);
140. Maxwell J. Mehlman, Fiduciary Contracting: Limitations on Bargaining Between Patients and Health Care Providers, 51 U. Pitt. L. Rev. 365, 401-14 (1990);
141. A.M. Swarthout, Annotation, Validity and Construction of Contract Exempting Hospital or Doctor from Liability for Negligence to Patient, 6 A.L.R.3D 704 (1966).
142. See, e.g., President and Dirs. of Georgetown Coll. v. Hughes, 130 F.2d 810,827 (D.C. Cir. 1942) (rejecting complete immunity for charitable hospitals).
143. James H. Henderson & John A. Siliciano, Universal Health Care and the Continued Reliance on Custom in Determining Medical Malpractice, 79 Cornell L. Rev. 1382, 1403 (1994) (noting that courts "covertly" adjust the standard of care to resource-dependent professional customs);
144. see also Hall v. Hilbun, 466 So. 2d 856, 872-73 (Miss. Ct. App. 1985) (considering resources in determining which localities are similar).
145. See generally Mark A. Hall, Mary Anne Bobinski & David Orentlicher, Medical Liability and Treatment Relationships 324-25 (2005) (surveying various authorities).
146. Courts have not faced this issue for several reasons. One is that defense lawyers are reluctant to raise resource constraints as a defense because financial motivation for substandard care would likely be used by plaintiffs as a sword, even to the extent of justifying punitive damages. Id at 325-26.
147. Another is that medical practices in HMOs or other resource-constrained settings do not in fact vary much from full-payment settings. See Mark A. Hall, Mary Anne Bobinski & David Orentlicher, The Law of Health Care Finance and Organization 220-21 (2005) (reviewing empirical studies of HMO impacts).
148. Research has turned up only two cases broadly on point. One suggests financial resources should matter and the second holds they should not. Compare Moss v. Miller, 625 N.E.2d 1044, 1051 (Ill. App. Ct. 1993) with Rogers v. Okin, 478 F. Supp. 1342, 1384 (D. Mass. 1979), rev'd on other grounds, Rogers v. Okin, 634 F.2d 650 (1st Cir. 1980).
149. Neither addresses patient cost-sharing. Instead, they both consider care provided for free by institutions with limited budgets. The first case reversed a defense verdict against a prisoner who alleged negligent failure to refer him to a specialist, reasoning that the jury instructions improperly suggested that "those practicing the medical arts in the penitentiary are held to [a different] standard of care." Moss, 625 N.E.2d at 1051.
150. The second case, however, ruled in a challenge to conditions at a state mental hospital that it was "relevant... to consider the medical resources and support facilities available" to the psychiatrists at the hospital in determining whether they used psychotropic medication reasonably. Rogers, 478 F. Supp. at 1384.
151. E. Haavi Morreim, Holding Health Care Accountable 80-82 (2001);
152. Randall R. Bovbjerg & William G. Kopit, Coverage and Care for the Medically Indigent: Public and Private Options, 19 Ind. L. Rev. 857, 916 (1986);
153. Mark A. Hall, Health Care Cost Containment and the Stratification of Malpractice Law, 30 Jurimetrics J. 501-08 (1990);
154. Siliciano, supra note 83, at 482;
155. Jonathan J. Frankel, Note, Medical Malpractice Law and Health Care Cost Containment, 103 Yale L.J. 1297, 1325-26 (1994).
156. See sources cited supra note 90.
157. Some support can be found in Hall v. Hilbun, which held that the skill
158. see also Primus v. Galgano, 329 F.3d 236, 241 (1st Cir. 2003) (stating that it is permissible to consider local resources as a relevant circumstance in determining the standard of care under a uniform national standard);
159. Brune v. Belinkoff, 235 N.E.2d 793, 798 (Mass. 1968) (same). Support is also found in a federal statute that adjusts the standard of care according to whether treatment is consistent with Medicare payment guidelines while still requiring physicians to "exercise[] due care." 42 U.S.C. § 1320c-6(c) (2000);
160. see Mark A. Hall, The Defensive Effect of Medical Practice Policies in Malpractice Litigation, 54 Law & Contemp. Probs. 119, 136-40 (Spring 1991) (discussing the statute);
161. Leah S. Crothers, Note, Professional Standards Review and the Limitation of Services, 54 B.U. L. Rev. 931 (1974) (same).
162. E.g., Clark C. Havighurst, Private Reform of Tort Law Dogma: Market Opportunities and Legal Obstacles, 49 Law & Contemp. Probs. 143 (Spring 1986).
163. Some courts have also refused to enforce agreements to arbitrate malpractice disputes, but most courts have approved these. Hall, Bobinski & Orentlicher, supra note 87, at 427.
164. See William H. Ginsburg, Steven J. Kahn, Michael C. Thornhill & Steven C. Gambardella, Contractual Revisions to Medical Malpractice Liability, 49 Law & Contemp. Probs. 253 (Spring 1986) (reviewing relevant cases).
165. Id.
166. Note, though, that some courts require treatment refusals to meet legal standards of informed consent. E.g., Truman v. Thomas, 611 P.2d 902, 906-07 (Cal. 1980) (requiring a physician to better inform a patient of why she needed a cancer screening test that she refused on multiple occasions).
167. Z.Y. Aliyu, Discharge Against Medical Advice: Sociodemographic, Clinical and Financial Perspectives, 56 Int'l J. Clinical Practice 325 (2002);
168. Patricia Green, Diane Watts, Sabrina Poole & Vasant Dhopesh, Why Patients Sign out Against Medical Advice (AMA): Factors Motivating Patients to Sign out AMA, 30 Am. J. Drug & Alcohol Abuse 489 (2004);
169. David B. Smith & Joel L. Telles, Discharges Against Medical Advice at Regional Acute Care Hospitals, 81 Am. J. Public Health 212 (1991);
170. Saul N. Weingart, Roger B. Davis & Russell S. Phillips, Patients Discharged Against Medical Advice from a General Medicine Service, 13 J. Gen. Internal Med. 568 (1998).
171. E.g., Baxley v. Rosenblum, 400 S.E.2d 502,508 (S.C. Ct. App. 1991) (upholding assumption-of-risk instruction when a patient, who also was a physician, refused a treatment option recommended by his doctor).
172. Other examples arise in cases of Jehovah's Witnesses who refuse blood transfusions. See generally Kurtis A. Kemper, Annotation, Contributory Negligence, Comparative Negligence, or Assumption of Risk, Other than Failing to Reveal Medical History or Follow Instructions, as Defense in Action Against Physician or Surgeon for Medical Malpractice, 108 A.L.R.5TH 385 (2005).
173. See James F. Blumsein, The Legal Liability Regime: How Well Is It Doing in Assuring Quality, Accounting for Costs, and Coping with an Evolving Reality in the Health Care Marketplace?, 11 Annals Health L. 125, 133-34 (2002) (discussing various ways in which the law accommodates "medical pluralism").
174. See, for example, the following account by a physician who was sued for following a conservative approach to screening for prostate cancer, as recommended by national guidelines. Daniel Merenstein, Winners and Losers, 291 JAMA 15, 16 (2004) ("The jury sent a message... that they didn't believe in the national guidelines.").
175. Cf., e.g., Schneider v. Revici, 817 F.2d 987, 996 (2d Cir. 1987) (signing an informed consent form for unorthodox cancer treatment created a jury question regarding patient's assumption of risk).
176. See, e.g., id at 993 (permitting jury to find that unorthodox treatment was acceptable despite testimony that the practitioner was a "quack" and "one of the cruelest killers in the United States").
177. See Mark A. Hall, Ira Mark Ellman & Daniel S. Strouse, Health Care Law and Ethics in a Nutshell 82-115 (2d ed. 1999) (summarizing the governing law).
178. Mathew Gregory, Hard Choices: Patient Autonomy in an Era of Health Care Cost Containment, 30 Jurimetrics J. 483, 499 (1990);
179. Mark A. Hall, A Theory of Economic Informed Consent, 31 U. Ga. L. Rev. 511, 528-33 (1997).
180. Uwe Reinhardt, Chapter 1, in Uncompensated Hospital Care: Rights and Responsibilities 1, 8 (Frank A. Sloan, James Blumstein & James Perrin eds., 1986).
181. For instance, the leading case on a physician's freedom to refuse patients is a century old. Hurley v. Eddingfield, 59 N.E. 1058 (Ind. 1901) (holding that a physician need not give any justification for refusing to treat a patient who subsequently died). The core of medical malpractice doctrine remains largely unchanged from the nineteenth century, other than the locality component of the standard of care.
182. See DeVille, supra note 23, at 206-14.