Implementing American health care reform: The fiduciary imperative

Buffalo Law Review

Volumn 59, Issue 3, 2011, Pages 715-807

  Matthew, Dayna Bowen ^a  

^a UNIVERSITY OF COLORADO   (United States)

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EID: 79959623737     PISSN: 00239356     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (502)

1. Genesis 2:20 (New International Version).
2. Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010)
3. amended by Health Care Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (2010) (codified as amended in scattered sections of 42 U. S. C.).
4. 42 U. S. C. A. § 18021 (a) (West Supp. 2010).
5. Id. § 18022.
6. Id. §§ 1395w-5 (a), (c).
7. Id. § 1395jjj (a) (1).
8. Id. § 256a-l (c) (2).
9. Id. § 18041 (a) (1).
10. Id. § 18001 (c).
11. Id. § 1396d (y).
12. Id. §§ 1396a (k) (1), 1396u-7 (b) (1).
13. Id. §§ 1396a (k) (1), 1396u-7 (b) (2).
14. Florida ex rel. Bondi v. U. S. Dep't of Health and Human Servs., No. 3.10-cv-91-RV/EMT, 2011 WL 285683 (N. D. Fla. Jan. 31, 2011) (granting summary judgment to plaintiffs on grounds that the individual mandate exceeds Congressional commerce clause powers).
15. One such measure has already passed in Missouri. See Monica Davey, In Missouri, Health Law is Rejected by Voters, N. Y. TIMES, Aug. 3, 2010, at A11.
16. * 122.
17. See John Marshall, A Friend of the Constitution, ALEXANDRIA GAZETTE (July 15, 1819)
18. reprinted in JOHN MARSHALL'S DEFENSE OF MCCULLOCH V. MARYLAND 207, 211 (Gerald Gunther ed., 1969).
19. See infra Section II. A.
20. Alabama is the only state to have held that physician-patient relationships are not fiduciary. Gunter v. Huddle, 724 So. 2d 544, 546 (Ala. Civ. App. 1998).
21. In Pegram v. Herdrich, the Supreme Court cited the seminal treatise on trust law to explain its decision not to allow the defendant HMO to be held liable for medical error as a fiduciary. Pegram v. Herdrich, 530 U. S. 211, 224-25, 231 (2000). My argument here is not that the outcome of Pegram would or should have been different if this misunderstanding were corrected, but that the decision has unfortunately constrained subsequent courts and commentators from applying fiduciary law as the important and useful tool it is in addressing health care policy dilemmas.
22. See, e.g., 49 A. L. R. 3d 501 § 2 (a) (1973) ("The relationship of physician and patient is one of trust and confidence imposing on the physician a fiduciary duty to reveal to the patient that which in his best interest he should know.").
23. See Peter J. Jacobson & Michael T. Cahill, Applying Fiduciary Responsibilities in the Managed Care Context, 26 AM. J. L. & MED. 155, 160 (2000);
24. E. Haavi Morreim, High-Deductible Health Plans: New Twists in Old Challenges From Tort and Contract, 59 VAND. L. REV. 1207, 1234-35 (2006).
25. Robert Cooter & Bradley J. Freedman, The Fiduciary Relationship: Its Economic Character and Legal Consequences, 66 N. Y. U. L. REV. 1045, 1055-56 (1991).
26. See Mitchell v. Harris, 246 So. 2d 648, 651-52 (Ala. 1971) (stating that there is no fiduciary relationship between physician and patient as a matter of law);
27. Gunter, 724 So. 2d at 546.
28. Barack Obama, President of the United States, Address to the American People Following the Signing of the Affordable Care Act (Mar. 23, 2010) (transcript available at http://www.whitehouse.gov/blog/2010/03/22/whatchange- looks).
29. Health Insurance Exchanges, CENTERS FOR MEDICARE & MEDICAID SERVICES-CENTER FOR CONSUMER INFORMATION, http://cciio.cms.gov/programs/ exchanges/index.html (last visited Apr. 10, 2011) ('The Affordable Care Act helps create a competitive private health insurance market through the creation of health insurance Exchanges. These state-run, transparent marketplaces, which launch in 2014, will provide millions of Americans and small businesses with "one-stop shopping" for affordable coverage.").
30. Robert Pear & Jackie Calmes, Senators Reject Pair of Public Option Proposals, N. Y. TIMES, Sept. 29, 2009, http://www.nytimes.com/2009/09/30/ health/policy/30health.html.
31. Letter from Douglas W. Elmendorf, Director, Congressional Budget Office, to Nancy Pelosi, Speaker, U. S. House of Representatives (March 20, 2010), available at http://www.cbo.gov/ftpdocs/113xx/docll379/AmendReconProp.pdf [hereinafter Congressional Budget Office Letter].
32. But see RAND RESEARCH BRIEF, ANALYSIS OF THE PATIENT PROTECTION AND AFFORDABLE CARE ACT 3 (H. R. 3590) (2010), available at http://www.rand.org/ pubs/research-briefs/RB9514.html (finding that number to be 28 million).
33. 26 U. S. C. A. § 36B (West Supp. 2011).
34. Under ACA Title II, Congress extended Medicaid coverage to childless adults earning up to 133% of the federal poverty level, 42 U. S. C. A. § 1396a (a) (10) (A) (i) (VIII) (West Supp. 2010);
35. former foster children, Pub. L. No. 111-148, § 2004, 124 Stat. 283 (2010);
36. and to freestanding birth centers, 42 U. S. C. A. § 1396d (a) (28) (West Supp. 2010).
37. 42 U. S. C. A. § 1396a (West Supp. 2010);
38. see also Alec MacGillis, Study of Health-Care Law Rebuts State Protests on Medicaid Costs, WASH. POST, May 26, 2010, http://www.washingtonpost.com/wp- dyn/content/article/2010/05/26/AR2010052603216.html (summarizing a Kaiser Family Foundation study finding that state spending for increased Medicaid coverage will be mitigated by federal expenditures).
39. 42 U. S. C. A. § 280g-15.
40. Id. § 1395cc-4 (c) (3) (C) (i).
41. For a summary of all pilot and demonstration projects under the ACA prepared by the Capital Health Group, see Pilot Programs and Demonstration Projects, available at http://www.caphg.com/media/CHG%20Summary- %20Pilot%20Programs%20and%20Demonstration%20Projects.pdf.
42. 42 U. S. C. A. § 297b (a) (West Supp. 2010).
43. Id. § 295f (a).
44. Id. § 292s (a) (1).
45. Id. § 295f-l (a).
46. Id. § 1315a (a) (1).
47. Id. § 1320e (b).
48. Id. §1395 (i).
49. See, e.g., John V. Jacobi, The Present and Future of Government-Funded Reinsurance, 51 St. LOUIS U. L. J. 369, 377 (2007) (favoring a universal coverage system as opposed to an incrementalist approach);
50. Eleanor D. Kinney, Rule and Policy Making Under Health Care Reform, 47 ADMIN. L. REV. 403, 404 (1995);
51. David Pratt, The Past, Present and Future of Health Care Reform: Can It Happen?, 40 J. MARSHALL L. REV. 767, 796 (2007).
52. Congressional Budget Office Letter, supra note 27.
53. See, e.g., Walk v. Ring, 44 P.3d 990, 999 (Ariz. 2002) ("We long ago held that a patient and a doctor were in a fiduciary relationship 'calling for frank and truthful information from' doctor to patient.")
54. (quoting Acton v. Morrison, 155 P.2d 782, 784 (Ariz. 1945)).
55. See also Moore v. Regents of Univ. of Cal., 793 P.2d 479, 483 (Cal. 1990) (asserting a physician's fiduciary duty to disclose personal financial interest in a procedure and citing California case law in support dating back to 1947);
56. Stafford v. Schultz, 270 P.2d 1, 7-8 (Cal. 1954).
57. But cf. Gunter v. Huddle, 724 So. 2d. 544, 546 (Ala. Civ. App. 1998) (uniquely holding that the physician-patient relationship is not fiduciary).
58. See, e.g., Tracy v. Merrell Dow Pharm., Inc., 569 N. E.2d 875, 879 (Ohio 1991).
59. Hales v. Pittman, 576 P.2d 493 (Ariz. 1978) ("[B]ecause of the fiduciary relationship between physician and patient, the scope of the disclosure required can be expanded by the patient's instructions to the physician. ");
60. Demers v. Gerety, 515 P.2d 645, 648, 650 (N. M. Ct. App. 1973) (approving an instruction on the fiduciary relationship in an action where the patient had not consented to an operation that had been performed).
61. See Nardone v. Reynolds, 538 F.2d 1131, 1136 (5th Cir. 1976) (holding that breach of fiduciary duty occurs when a doctor fails to disclose a known condition, and that such duty does not expire when the consensual-contractual relationship ends);
62. Batty v. Ariz. State Dental Bd., 112 P.2d 870, 876-77 (Ariz. 1941) (noting that in all such dealings, a physician's relationship with a patient is one of trust and confidence and that a provider must use the utmost good faith or he is guilty of fraud).
63. See, e.g., Davis v. Rodman, 227 S. W. 612, 614 (Ark. 1921) ("The relation of a physician to his patient and the immediate family is one of the highest trust.").
64. But see Lemon v. Stewart, 682 A.2d 1177, 1183 (Md. Ct. Spec. App. 1996) (recognizing that the relationship between a health care provider and a patient is based on trust and confidence, giving a patient the right to assume his HIV-positive status will not be voluntarily disclosed to relatives without consent);
65. Morris v. Consol. Coal Co., 446 S. E.2d 648, 657 (W. Va. 1994) (holding that a patient has a cause of action against a physician disclosing information to an employer for breach of the duty of confidentiality and against an employer who induced the physician to breach his fiduciary relationship by disclosing confidential information).
66. See e.g., Petrillo v. Syntex Lab., Inc., 499 N. E.2d 952, 962 (111-App. Ct. 1986) (finding that public policy favoring physician-patient confidentiality and the fiduciary nature of the physician-patient relationship justifies prohibition against ex parte communication);
67. Sorensen v. Barbuto, 2008 UT 8
68. P.3d 614, 619-20 (2008) (holding that the health care fiduciary duty of confidentiality prohibits ex parte communications between a tort plaintiff's treating physician and defense counsel in the underlying tort action).
69. See, e.g., State ex rel. Dean v. Cunningham, 182 S. W.3d 561, 566 (Mo. 2006) (holding that the fiduciary duty of confidentiality between patients and doctors is part of the foundation of the doctor-patient evidentiary privilege).
70. But cf. Stigliano v. Connaught Lab., Inc., 658 A.2d 715, 721 (N. J. 1995) (bringing a medical malpractice suit waived the physician-patient privilege concerning the patient's treatment because it put the plaintiff's medical condition in issue).
71. Piller v. Kovarsky, 476 A.2d 1279, 1282 (N. J. Super. Ct. Law Div. 1984) ("[T]he fiduciary nature of the [physician-patient] relationship should preclude a physician from testifying against his patient as a liability expert, at least in a medical malpractice action involving the very condition for which the physician has treated the patient.").
72. See Houghton v. West, 305 S. W.2d 407, 411-12 (Mo. 1957) (the defendant physician had a fiduciary relationship which carried into the parties' dealings beyond the medical treatment rendered);
73. see also Mattingly v. Sisler, 175 P.2d 796 (Okla. 1957): It is contended that the relation of physician and patient constitutes a confidential relationship and it is further contended that where the evidence shows the existence of such relationship and the party in whom confidence is reposed obtains an apparent advantage over the other in a transaction between them such transaction is presumed to be void and the burden of proof is upon the party who seeks to support it to show by clear proof that he has taken no advantage over the other party and that the transaction is fair, free from fraud and is conscientious. This is a correct statement of the law.
74. Id. at 799.
75. See, e.g., Unruh v. Lukens, 31 A. 110, 113 (Pa. 1895).
76. Hoopes v. Hammargren, 725 P.2d 238, 242 (Nev. 1986) (stating that a physician who takes advantage of a vulnerable patient would "fall below the acceptable standard for a fiduciary").
77. But cf. Korper v. Weinstein, 783 N. E.2d 877, 881-82 (Mass. App. Ct. 2003) (finding that a physician did not breach the fiduciary duty owed to the patient by engaging in a consensual sexual relationship with her, because a fiduciary relationship does not encompass all interaction between parties measured by fiduciary standards).
78. Ison v. McFall, 400 S. W.2d 243, 258 (Tenn. Ct. App. 1964) (providing that any physician, chiropractor, or M. D. who has a fiduciary relationship with his patient and who knows or should know that a treatment will not benefit his patient must advise his patient of that fact).
79. See Forziati v. Bd. of Registration in Med., 128 N. E.2d 789, 791-92 (Mass. 1955).
80. See, e.g., Garcia v. Coffman, 946 P.2d 216, 218, 223 (N. M. Ct. App. 1997) (affirming the trial court's finding of breach of fiduciary duty in a case where a doctor's protocol included "unnecessary computerized muscle testing" performed by "incompetent personnel", on grounds that there was not full and fair disclosure).
81. See, e.g., Agency for Health Care Admin, v. Wingo, 697 So. 2d 1231, 1232-33 (Fla. Dist. Ct. App. 1997).
82. In Petre v. Living Centers-East, Inc., 935 F. Supp. 808 (E. D. La. 1996), the court stated that "fiduciary relationships are most often found in financial dealings", and that it could "think of no relationship which better fits the... description [of fiduciary duty] than that which exists between a nursing home and its residents."
83. Id. at 812.
84. See Rohlfing v. Manor Care, Inc., 172 F. R. D. 330, 350-51 (N. D. 111. 1997) (upholding a breach of fiduciary duty action against a nursing home and a related pharmaceutical company to recover excessive fees where a resident had confidence in the nursing home and the nursing home was found to be in a position of "superiority and influence");
85. Greenfield v. Manor Care, Inc., 705 So. 2d 926, 931-32 (Fla. Dist. Ct. App. 1997) (finding a fiduciary duty between a nursing home and its residents that was rooted in a special relationship independent of any contract).
86. Jackson v. Okla. Mem'l Hosp., 909 P.2d 767, 773 (Okla. 1995) ("A licensed attending faculty physician-who, as a member of a state medical school faculty, is charged with delivery of medical care to patients-performs much the same function as an attending physician at a private health-care facility.").
87. But cf. Nutty v. Jewish Hosp., 571 F. Supp. 1050, 1052-53 (S. D. 111. 1983) (explaining the difficulty of deeming a patient's relationship with a hospital a fiduciary one).
88. See HIPPOCRATES, THE OATH OF HIPPOCRATES, REPRINTED IN THE HARVARD CLASSICS VOLUME 38: SCIENTIFIC PAPERS (PHYSIOLOGY, MEDICINE, SURGERY, GEOLOGY) 11 (2006).
89. Id.
90. Translation from the Greek, in LUDWIG EDELSTEIN, THE HLPPOCRATLC OATH: TEXT, TRANSLATION, AND INTERPRETATION 3 (1943).
91. The Hippocratic Oath, NAT'L KIDNEY AND TRANSPLANT DIV. OF UROLOGY (March 1, 2009), http://members.tripod.com/nktiuro/hippocra.htm.
92. See, e.g., Charity Scott, Doctors as Advocates, Lawyers as Healers, 29 HAMLINE J. PUB. L. & POL'Y 331, 335-37 (2008). Referencing the "long and honorable history" of physicians as fiduciaries flowing from medical ethicists such as doctors Laurence B. McCullough, John Gregory, and Thomas Pervical, Professor Scott explains how the physician's ethical obligations to be competent and loyal, to act for the benefit of their patients, to refrain from self-interested behavior, and to keep patient confidences while disclosing relevant information parallel a physician's legal duties as a fiduciary.
93. Id.
94. Emily Chow, Note, Health Courts: An Extreme Makeover of Medical Malpractice with Potentially Fatal Complications, 7 YALE J. OF HEALTH POL;Y, L. & ETHICS 387, 404 (2007)
95. * 122)).
96. In re Smith, 10 Wend. 449, 456 (N. Y. Sup. Ct. 1833).
97. Edwards v. Stewart, 15 Barb. 67, 68 (N. Y. Gen. Term 1853).
98. See id. at 68-69. When a party undertakes a work of skill and labor and performs it so unskillfully that his employer derives no benefit from the work, he is not entitled to recover any thing [sic], for his labor. This is an elementary principle; and if the employer not only derived no benefit from the services, but sustained a positive injury, entitling him to compensation for damages, the case is still stronger against the laborer or professional man.
99. Id.
100. See Marc A. Rodwin, Strains in the Fiduciary Metaphor: Divided Physician Loyalties and Obligations in a Changing Health Care System, 21 AM. J. L. & MED. 241, 249 (1995).
101. See, e.g., Caroline Forell and Anna Sortun, The Tort of Betrayal of Trust, 42 U. MICH. J. L. REFORM 557, 565 (2009) ("Trust and loyalty are what distinguish fiduciary from non-fiduciary relationships.");
102. see also Brian M. Serafin, Comparative Fault and Contributory Negligence as Defenses in Attorney Breach of Fiduciary Duty Cases, 21 GEO. J. LEGAL ETHICS 993, 995 (2008) ('The factor which most distinguishes negligence from breach of fiduciary duty is what constitutes duty.").
103. See Serafin, supra note 71, at 994-95.
104. RESTATEMENT (THIRD) OF AGENCY § 8.01 cmt. d (1) (2006).
105. For a discussion of the differences between negligence and breach of fiduciary duty causes of action, see generally Serafin, supra note 72.
106. RESTATEMENT (THIRD) OF AGENCY § 8.01 cmt. d (1) (2006).
107. See Jonathan J. Frankel, Medical Malpractice Law and Health Care Cost Containment: Lessons for Reformers from the Clash of Cultures, 103 YALE L. J. 1297, 1315-16 (1994);
108. Joseph H. King, Jr., In Search of a Standard of Care for the Medical Profession: The "Accepted Practice" Formula, 28 VAND. L. REV. 1213, 1234-36 (1975);
109. Allan H. McCoid, The Care Required of Medical Practitioners, 12 VAND. L. Rev. 549, 558-59 (1959).
110. See, e.g., M. Gregg Bloche, The Emergent Logic of Health Law, 82 S. CAL. L. REV. 389, 462 (2009) ("The malpractice system's greatest failing, from a quality and value perspective, is its reliance on clinical practitioners to specify standards of care.").
111. See, e.g., E. Haavi Morreim, Medicine Meets Resource Limits: Restructuring the Legal Standard of Care, 59 U. PITT. L. REV. 1, 3-5 (1997).
112. See, e.g., Lownsbury v. Van Buren, 762 N. E.2d 354, 357-58 (Ohio 2002) (emphasizing that the physician-patient relationship is a fiduciary one based on the patient's trust and confidence (meaning that the patient will rely on the judgment and expertise of the physician), and based on the fact that the patient obtained the physician's services because of special knowledge and skill held by the physician);
113. Hunter v. Brown, 484 P.2d 1162, 1166 (Wash. 1971) ('"We agree with appellant that a physician's duty to disclose is not governed by the standard practice of the physicians' community, but it is a duty imposed by law which governs his conduct in the same manner as others in a similar fiduciary relationship"')
114. (quoting Berkey v. Anderson, 82 Cal. Rptr. 67, 78 (1969)).
115. See generally Paul B. Miller & Charles Weijer, Fiduciary Obligation in Clinical Research, 34 J. L. MED. & ETHICS 424 (2006).
116. 530 U. S. 211 (2000).
117. See Maxwell J. Mehlman, Dishonest Medical Mistakes, 59 VAND. L. Rev. 1137, 1156 ("The [Supreme] Court seems to close the door on all actions against physicians for breach of fiduciary duty, not just claims brought under ERISA, on the basis that they are nothing more than medical malpractice claims.").
118. In criticism of the Circuit Court of Appeals decision to limit fiduciary actions to those involving a financial conflict of interest, the Supreme Court reasoned: [T]his attempt to confine mixed decision claims to their most egregious examples entails erroneous corruption of fiduciary obligation and would simply lead to further difficulties we think fatal. When a mixed [treatment and eligibility] decision made solely to benefit the HMO or its physician would violate a fiduciary duty, the fiduciary standard condemns far more than that, in its requirement of "an eye single" toward beneficiaries' interests.
119. Pegram, 530 U. S. at 235 (emphasis added).
120. Paul F. Figley & Jay Tidmarsh, The Appropriations Power and Sovereign Immunity, 107 MICH. L. REV. 1207, 1213 (2009)
121. (quoting Ludwik Ehrlich, Proceedings Against the Crown (1216-1377), in OXFORD STUDIES IN SOCIAL AND LEGAL HISTORY 97 (Paul Vinogradoff ed., Octagon Books 1974) (1921)).
122. Frances H. Miller, Secondary Income from Recommended Treatment: Should Fiduciary Principles Constrain Physician Behavior?, in NEW HEALTH CARE FOR PROFIT: DOCTORS AND HOSPITALS IN A COMPETITIVE ENVIRONMENT 155 (Bradford H. Gray ed., 1983).
123. See id. at 153, 166.
124. Id. at 159.
125. See id. (referring to the "Robin Hood method of prices" which the author thought ended with the advent of Medicare and Medicaid).
126. See id. at 154-55.
127. See id. at 157.
128. Rodwin, supra note 70, at 242. But cf. infra Section II. A.1 (discussing Rodwin's error in analyzing physicians as trustees).
129. See Rodwin, supra note 70, at 242-45. Rodwin stated that these groups are "entrusted with power and property to be used for the benefit of another", are "held to the highest standard of conduct", are repositories for specialized knowledge and expertise, are given latitude to exercise discretion, and are expected to work on behalf of those who are dependent and reliant on them.
130. Id. at 243-44. They must be "scrupulously honest", may not divulge confidences, and cannot promote their own self-interest or the interest of a third party over the best interest of their beneficiary (or "fiducie", as Rodwin suggests).
131. Id. They owe loyalty and are subject to judicial scrutiny holding them to "something stricter than the morals of the market place."
132. Id. at 244
133. (quoting Meinhard v. Salmon, 249 N. Y. 458, 464 (1928) (Cardozo, J.)).
134. See id. at 249.
135. See id. at 249-51.
136. Id. at 245.
137. See infra Section II. A.1 for an explanation on how the mistake of choosing trust rather than agency law to define medical fiduciary obligations, as Rodwin has done here, has resulted in a fiduciary doctrine that is ill-fitting and therefore prompts jurist to resist applying fiduciary law to health care.
138. See Rodwin, supra note 70, at 247.
139. Id. at 255-56.
140. Id. at 255.
141. See id.
142. Id. at 255 (footnote omitted).
143. Mark A. Hall, Law, Medicine, and Trust, 55 STAN. L. REV. 463, 468 (2002). Professor Hall proffers trust as an organizing principle for health law based upon the empirical evidence that patients trust physicians, patients want to trust physicians, relationships between physicians and patients where trust is absent are dysfunctional, and the deep emotional content of trust in its essence has an instrumentalist therapeutic effect on patients, helping them to heal. See id. at 478-79. Hall says that this therapeutic paradigm also encompasses institutional relationships between hospitals and insurers, for example, and the component relationship between government and the profession.
144. See id. at 467. But I argue that the shortcoming in this analysis lies in considering all these relationships with reference only to the patient's individual experience in the delivery of care. See infra Section II. B.2 for a discussion of the application of the fiduciary model to patient populations.
145. See Hall, supra note 102, at 470.
146. Id. at 487.
147. See id.
148. Id. at 490.
149. Id. at 490-91.
150. See M. Gregg Bloche, Comment, Trust and Betrayal in the Medical Marketplace, 55 STAN. L. REV. 919, 927, 930-31 (2002).
151. Hall, supra note 102, at 469
152. (quoting Richard Sherlock, Reasonable Men and Sick Human Beings, 80 Am. J. Med. 2, 3 (1986)).
153. Bloche, supra note 108, at 930
154. (citing Cooter & Freedman, supra note 22, at 1046-47).
155. This is illustrated by the fact that he begins his critique by citing the ethical catastrophes of Enron and WorldCom, then condemns the notion of allowing fiduciaries to contract out of their obligations. Id. at 921, 925. Bloche, in his critique of Hall's trust article, evinces the tension between individualist and communal tendencies in the law. Speaking of the cost control objective, Bloche admits by his own personal testimonial that "[a]s taxpayers, health insurance purchasers, and price-conscious shoppers for goods and services, we demand medical cost control-from government, our own health plans, and the businesses we patronize. That we resist these controls when we and our loved ones face life-threatening or life-changing illness is, for contractarians, the central dilemma of health care policy."
156. Id. at 953.
157. Id. at 932-33 (emphasis added).
158. Maxwell J. Mehlman, Dishonest Medical Mistakes, 59 VAND. L. Rev. 1137 (2006).
159. See id. at 1147.
160. Id. at 1138, 1141-42.
161. Id. at 1147.
162. Id. at 1154.
163. Id. at 1137.
164. Id. at 1172.
165. Id. at 1172 (emphasis added) (citation omitted).
166. Professor Michelle Oberman found the fiduciary construct limited and indeed "hollow" as it applies to doctors treating pregnant patients. See Michelle Oberman, Mothers and Doctors' Orders: Unmasking the Doctor's Fiduciary Role in Maternal-Fetal Conflicts, 94 NW. U. L. REV. 451, 457 (2000). Oberman advocated expressly augmenting physicians' fiduciary duties to disclose their bifurcated loyalty to patients in utero so that pregnant patients could be warned that their trust in physicians may be compromised.
167. See id. at 464-66.
168. Professor Scott sought to add to fiduciary duty the obligation to disclose and apologize for medical error, and further suggested there might be a fiduciary duty of continuing care owed to patients who seek futile treatments. See Scott, supra note 65, at 368;
169. see also Richard W. Bourne, Medical Malpractice: Should Courts Force Doctors to Confess Their Own Negligence to Their Patients?, 61 ARK. L. REV. 621, 623 (2009).
170. Professors Miller and Weijer argued to add clinical physician-researchers to the list of physicians who owe a fiduciary duty to protect patient-subjects. See Paul B. Miller & Charles Weijer, Fiduciary Obligation in Clinical Research, 34 J. L. MED. & ETHICS 424, 428-31 (2006).
171. Professors Hafemeister and Bryan posited that doctors have a negative fiduciary duty to shun pharmaceutical gifts. See generally Thomas L. Hafemeister & Sarah P. Bryan, Beware Those Bearing Gifts: Physicians' Fiduciary Duty to Avoid Pharmaceutical Marketing, 57 U. KAN. L. REV. 491 (2009).
172. By "our struggle", I mean that I count myself among those who have argued for expanding fiduciary rules. I argued that racial, ethnic, and religious disparities in informed consent law and practice could be addressed by a broader concept of doctors' fiduciary responsibilities. See Dayna Bowen Matthew, Race, Religion, and Informed Consent-Lessons from Social Science, 36 J. L. MED. & ETHICS 150, 167 (2008).
173. Miller, supra note 85, at 154-55;
174. Rodwin, supra note 70, at 242.
175. Quality measures are "a standard for measuring the performance and improvement of population health or of health plans, providers of services, and other clinicians in the delivery of health care services." 42 U. S. C. A. § 299b-31 (West Supp. 2010).
176. The ACA requires the Secretary of the Department of Health and Human Services to identify and disseminate the results of effectiveness research showing the best practices identified across diverse patient groups.
177. Id. § 18022;
178. see also id. § 1320e.
179. See e.g., id. § 1320 (e)
180. (creating the "Patient Centered Outcomes Research Institute", a non-profit corporation);
181. id. §§ 299b-31 & 299b-33 (creating the "Center for Quality Improvement and Patient Safety", an agency that will be part of the existing Agency for Healthcare Research and Quality according to ACA Title III, Section 3501 and ACA Title X, Section 10303);
182. id. § 1315 (a)
183. (creating the "Center for Medicare and Medicaid Innovation" which will operate within the existing Centers for Medicare and Medicaid Services).
184. Title III of the ACA creates the ACO program with the intent that it "promote[] accountability for a patient population and coordinate[] items and services under [Medicare] parts A and B, and encourage[] investment in infrastructure and redesigned care processes for high quality and efficient service delivery."
185. Id. § 1395jjj.
186. See, for example, id. § 300u-10, which establishes the National Prevention, Health Promotion and Public Health Council, increasing funding for school-based health centers and appropriating funds for community-based prevention efforts, immunization and wellness programs, and a host of other public health initiatives.
187. See Bloche, supra note 77, at 445-46.
188. SEC v. Chenery Corp., 318 U. S. 80, 85-86 (1943).
189. In Pegram v. Herdrich, 530 U. S. 211, 224 (2000), the Supreme Court cited the seminal treatise on trust law to explain its decision not to allow the defendant HMO to be held liable for medical error as a fiduciary. My argument here is not that the outcome of Pegram would or should have been different if this misunderstanding were corrected, but that the decision has unfortunately constrained subsequent courts and commentators from applying fiduciary law as the important and useful tool it is in addressing health care conflicts and policy dilemmas.
190. See, e.g., Allison v. Blewett, 348 S. W.2d 182, 184 (Tex. Civ. App. 1961) (noting that "[t]he relationship between doctor and patient is one of trust and confidence" rather than explicitly applying fiduciary duties to the relationship);
191. Rodwin, supra note 70, at 242 (referring to the "fiduciary metaphor" rather than concrete fiduciary rules).
192. See Airline Pilots Assoc., Int'l v. O'Neill, 499 U. S. 65, 74-75 (1991) (unions);
193. Eagan v. Jackson, 855 F. Supp. 765, 799-80 (E. D. Pa. 1994) (guardians);
194. Ginsburg ex rel. Palace Mgmt., 720 N. Y. S.2d 123, 124 (App. Div. 2001) (executors).
195. Pegram, 530 U. S. at 223-24 (repeatedly citing principles, cases, and treatises on the law of trusts to support a holding that defendant the Carle Clinic HMO did not violate its fiduciary duty to an injured patient by not immediately referring her to a specialist for an ultrasound to diagnose abdominal pain, in response to financial incentives that rewarded limited referrals).
196. For a chronological summary of the evolution of fiduciary law from trusts to agency to corporate contexts and beyond, see generally Tamar Frankel, Fiduciary Law, 71 CALIF. L. REV. 795 (1983).
197. 530 U. S. at 223-24.
198. AUSTIN W. SCOTT ET AL., SCOTT AND ASCHER ON TRUSTS § 1.1 at 3 (5th ed. 2006).
199. Id.
200. (quoting MAITLAND, SELECTED ESSAYS 129 (1936)). But see Frankel, supra note 138, at 795 n. l (stating that the law of trusts originated in thirteenth century French and German law).
201. See RESTATEMENT (THIRD) OF TRUSTS § 2 (2003);
202. pt. 3, ch. 8, intro. note (2010).
203. See RESTATEMENT (THIRD) OF TRUSTS § 2 (2003).
204. SCOTT et AL., supra note 140, § 17.2 at 1077-78.
205. RESTATEMENT (THIRD) OF TRUSTS § 78 (2007).
206. See, e.g., Meinhard v. Salmon, 164 N. E. 545 (N. Y. 1928).
207. Id. at 546.
208. SCOTT et AL., supra note 140, §17.5 at 1196.
209. Id. at 1198-99.
210. UNIFORM PROBATE CODE § 804 (2001).
211. UNIFORM TRUST CODE § 804 (2000).
212. See SCOTT et AL., supra note 142, § 17.6 at 1209.
213. See RESTATEMENT (THIRD) OF TRUSTS, § 77 at 82 (2007).
214. See generally SCOTT et AL., supra note 140, § 19.
215. For a summary of Stark Law history and exceptions, see Andrew B. Wachler & Adrienne Dresevic, Stark II Phase III-The Full Picture, 20 HEALTH LAW., Sept. 2007, at 1, 3.
216. While the relationship for medical treatment between a physician and patient is not ordinarily a trust, a patient can enter into a transaction with a physician to create a standard trust agreement. These transfers come under close scrutiny by the courts. In Unruh v. Lukens, 31 A. 110 (Pa. 1895), for example, a patient transferred property in trust to a physician who asserted the transfer was valid consideration for medical services rendered. However, the court cited the confidential relationship between the physician and patient and set aside the elderly woman's conveyance of real estate to doctor as trustee.
217. Id. at 113-14.
218. See also Macaulay v. Booth, 128 P.2d 386 (1942) (finding trust ultimately not set aside because defendant doctor overcame the presumption of undue influence).
219. RESTATEMENT (THIRD) OF TRUSTS §1 (2003).
220. Id. § 40. Because no law limits the form or type of property interest that may be held in trust, one might reason abstractly that a patient's health and body are a form of property but it would be very difficult to find any support for this abstraction in the scholarly literature much less in reality.
221. "Although an agent has a fiduciary relationship with the principal, just as a trustee has with the trust beneficiaries, the two relationships have a different history, and different consequences flow from them." SCOTT et AL., supra note 140, §2.3.4.
222. See, e.g., Pegram v. Herdrich, 530 U. S. 211, 224 (2000) (referencing the common law of trusts to define the scope of authority and responsibility of fiduciaries, including the medical fiduciary in Pegram)
223. (citing Cent. States, Se. & Sw. Areas Pension Fund v. Cent. Transp., Inc., 472 U. S. 559, 570 (1985));
224. id. (listing the stricter "morals of the market place" and general duties owed by trustees to describe duties owed by medical fiduciaries)
225. (quoting Meinhard v. Salmon, 249 N. Y. 458, 464 (1928)).
226. Following the Pegram decision, several lower courts have had difficulty trying to follow the Supreme Court's erroneous reliance on trust law in health care cases. In Batas v. Prudential Ins. Co. of Am., 281 A. D.2d 260 (2001), for example, the court tried to make sense of the error by substituting the term "duty of good faith" for the term "fiduciary duty", in order to describe situations where ERISA insurers and HMO's have disclosure obligations to patients.
227. Id. at 262.
228. State ex rel. McCloud v. Seier, 567 S. W.2d 127 (Mo. 1978).
229. Id. at 128;
230. see also Hammonds v. Aetna Cas. & Sur. Co., 237 F. Supp. 96 (D. C. Ohio 1965) (explaining that confidences in the trust of a physician are entitled to the same consideration as a res in the control of a trustee).
231. See The Nation's Health Dollar, Calendar Year 2009: Where it Came From, CENTERS FOR MEDICARE & MEDICAID SERVICES, NAT'L HEALTH EXPENDITURE DATA, https://www.cms.gov/NationalHealthExpendData/downloads/ PieChartSourcesExpenditures2009.pdf) (last visited Aug. 14, 2010).
232. See also Health, United States, 2009, NAT'L CENTER FOR HEALTH STATISTICS, 55 fig.21, 132 tbl.132, http://www.cdc.gov/nchs/data/hus/hus09.pdf (last visited Apr. 28, 2011) [hereinafter Health, United States, 2009].
233. Pegram, 530 U. S. at 225.
234. Ironically, when the Pegram Court cited the role of the "traditional trustee" to discard its application of fiduciary obligations to the defendant HMO, the Court favorably made comparison to a fiduciary relationship in agency law.
235. Id. at 225. The Court compared the role of employers as fiduciaries who could act in their own interests even when acting as fiduciaries for employees. But not once did the Pegram Court consider that agency law was the proper body of fiduciary law to apply to health care organizations even though the law of agency in fact controls employers and employees even in the very example the Court used: Speaking of the traditional trustee, Professor Scott's treatise admonishes that the trustee "is not permitted to place himself in a position where it would be for his own benefit to violate his duty to the beneficiaries." 2 A Scott § 170, at 311. Under ERISA, however, a fiduciary may have financial interests adverse to beneficiaries. Employers, for example, can be ERISA fiduciaries and still take actions to the disadvantage of employee beneficiaries, when they act as employers (e.g., firing a beneficiary for reasons unrelated to the ERISA plan), or even as plan sponsors (e.g., modifying the terms of a plan as allowed by ERISA to provide less generous benefits). Nor is there any apparent reason in the ERISA provisions to conclude, as Herdrich argues, that this tension is permissible only for the employer or plan sponsor, to the exclusion of persons who provide services to an ERISA plan.
236. Id. at 225.
237. John W. Pratt & Richard J. Zeckhauser, Principals and Agents: An Overview, in PRINCIPALS AND AGENTS: THE STRUCTURE OF BUSINESS 2 (John W. Pratt & Richard J. Zeckhauser eds., 1985).
238. Frankel, supra note 138, at 795.
239. See id. at 795-96.
240. RESTATEMENT (THIRD) OF AGENCY §1.01 (2006).
241. Id. § 14. But compare principals and agents to masters and servants. Both appear in the health care context. In some agency relationships, the principal may not have direct control over the agent outside of the matter in which the agent is acting on his behalf, as when an independent salesman serves as an agent for a store owner or an emergency room physician who is an independent contractor acts as an agent of the hospital under a contract to staff the emergency department. However, where the principal has direct control over every aspect of the agent's work, the principal is a master and the agent is a servant.
242. See RESTATEMENT (THIRD) OF AGENCY §1, cmts. d, e (2006).
243. See generally SCOTT ETAL., supra note 140, §2.3.4 at 62-67.
244. Id. at 62.
245. Id.
246. Id. at 62-63.
247. Id.
248. Id. at 63.
249. Id.
250. Id.
251. Id. at 64.
252. Id.
253. RESTATEMENT (THIRD) OF AGENCY § 8.01 (2006).
254. Id. §§ 8.01-8.05 (defining duty of loyalty).
255. Id. §§ 8.02, 8.04.
256. Id. § 8.05 (1).
257. Id. § 8.12 (1).
258. Id. § 8.12 (2).
259. Id. § 8.12 ("An agent has a duty, subject to any agreement with the principal.") (emphasis added).
260. Id. § 8.05 (2).
261. Id. § 8.08.
262. See id. § 8.08 & cmt. b.
263. See id. § 8.12 cmts. b, c.
264. Id. § 8.10.
265. Id.
266. See, e.g., Rookard v. Mexicoach, 680 F.2d 1257, 1263 (9th Cir. 1982) (explaining that the scope of a travel agent's duty of disclosure is limited to what is reasonable under the circumstances).
267. See, e.g., United States v. Schwab, 88 F. Supp. 2d 1275, 1286-87 (D. Wyo. 2000) (holding that an insurance agent's duty was to disclose material information to insurance company deciding whether to issue life insurance policies).
268. See generally RESTATEMENT (THIRD) OF AGENCY § 8.06 (2006).
269. See Jones v. Jackson Nat'l Life Ins. Co., 819 F. Supp. 1372, 1381 (W. D. Mich. 1993)
270. affd, 27 F.3d 566 (6th Cir. 1994) (holding that where a principalagent relationship was created by contract, that contract precluded the application of "general principles of agency law").
271. But cf. RESTATEMENT (SECOND) OF AGENCY § 381 cmt. a (1958)
272. (citing First Nat'l Bank of Mandan v. Larsson, 271 N. W. 289, 291 (N. D. 1937)) (holding that even if an agreement was for an agent to collect debt only, the agent should disclose information obtained in collecting debt that makes it important for the principal to take immediate legal action).
273. RESTATEMENT (THIRD) OF AGENCY § 8.11 cmt. c (2006).
274. See id. §§8.13-8.15.
275. See id. § 8.13 cmt. b.
276. * 9 (D. Conn. 2005) ("The relationship between principal and agent is confidential and fiduciary, and under this relationship, an agent owes his principal a full duty of disclosure. A principal, on the other hand, has the obligation to exercise good faith in the relationship and to disclose facts which, if known, would likely cause the agent to suffer pecuniary loss.")
277. (quoting McLendon v. Ga. Kaolin Co., 782 F. Supp. 1548, 1563 (M. D. Ga. 1992).
278. RESTATEMENT (THIRD) OF AGENCY § 8.15 cmt. d (2006);
279. see also Taylor v. Cordis Corp., 634 F. Supp. 1242, 1247 (S. D. Miss. 1986) (explaining that the corporation principal, as part of a duty of good faith, would have to inform sales agents of problems with products when there was a "concomitant threat to the professional reputation of the sales agent").
280. Hall, supra note 102, at 490.
281. See RESTATEMENT (THIRD) OF TRUSTS §§ 1-2 (2003).
282. 489 U. S. 101, 105 (1989).
283. 554 U. S. 105, 110, 111 (2008)
284. (quoting Firestone, 489 U. S. at 111-13).
285. Id. at 112-13, 119.
286. Id. at 111.
287. SeeSCOTT et AL., supra note 142, § 2.3.4 at 62-67;
288. supra pp. 755-56.
289. See supra pp. 755-56.
290. See id.
291. See id.
292. Metropolitan Life, 554 U. S. at 109.
293. See id.
294. See supra pp. 755-56.
295. See id.
296. See Metropolitan Life, 554 U. S. at 112-13.
297. See supra Section I, text accompanying notes 19-24. The two most prominent expansions will be through statewide entities that will market insurance and new, integrated provider organizations; both will introduce numerous new market players. Under Sections 1301-1321 of the ACA, each state must create or join insurance exchanges that will market and regulate insurance. Patient Protection and Affordable Care Act, 42 U. S. C. A. §§ 18021-18024, 18031-18033, 18041 (West Supp. 2010). Section 3022 introduces Accountable Care Organizations ("ACOs"), new provider organizations that will receive incentives to encourage them to take advantage of shared savings.
298. Id. § 1395jjj.
299. See supra Section I, text accompanying notes 26-40.
300. 26 U. S. C. A. § 36B (West Supp. 2010).
301. See BARRY FURROW ET AL., HEALTH CARE REFORM SUPPLEMENT TO HEALTH LAW CASES, MATERIALS AND PROBLEMS 146-47 (6th ed. 2010). The Congressional Budget Office has estimated that sixteen million new recipients will be eligible to receive Medicaid coverage, at an estimated cost to the federal government of $434 billion between 2010 and 2019, and $20 billion to the states during the same period.
302. Id.
303. see also Medicaid and Children's Health Insurance Program Provisions in the New Health Reform Law, KAISER FAMILY FOUNDATION 1-2 (Apr. 6, 2010), http://www.kff.org/healthreform/upload77952-03.pdf.
304. See THOMAS E. GETZEN, HEALTH ECONOMICS: FUNDAMENTALS AND FLOW OF FUNDS 349 (1997).
305. See, e.g., Sampson v. Contillo, 865 N. Y. S.2d 634, 637-38 (App. Div. 2008) (holding that a genuine issue of fact existed as to whether the hospital had an agency relationship with a radiologist, and that the issue of fact precluded granting summary judgment to the hospital).
306. Professors Mark Loewenstein and William Wang question the wisdom of holding out a corporate entity as an agent of its shareholders. See Mark J. Loewenstein & William K. S. Wang, The Corporation as Insider Trader, 30 DEL. J. CORP. L. 45, 47-53 (2005). They point out that courts have reached mixed results on the question of whether a corporation owes a fiduciary duty to individual shareholders who have competing interests and no direct control over corporate directors.
307. Id. at 48. Because of the overwhelming consensus in literature and common law, the lesson I take from the insightful analysis by Professors Loewenstein and Wang is that agency relationships are not uniform. Principals have varying degrees of control over the agents who act on their behalf. Multiple principals may have competing interests among themselves and even interests that conflict with their agents to some degree. In closely-held corporations, corporate directors (who are often majority shareholders) may owe a higher fiduciary responsibility to shareholders than is owed to those in a larger entity.
308. See, e.g., Crosby v. Beam, 548 N. E.2d 217, 221 (Ohio 1989);
309. Hagshenas v. Gaylord, 557 N. E.2d 316, 324 (111. App. Ct. 1990). A hospital with significant control over staff radiologists may be held vicariously liable for those doctors' negligence, while the same hospital may have considerably less control over a multi-specialty group of doctors who work at the hospital as independent contractors.
310. See Sampson, 865 N. Y. S.2d at 637. The latter group may be comprised of physicians with conflicting interests and the hospital may not have an employment contract with any of them, but an agency relationship can still exist between the hospital and these doctors if the elements of the law of agency are satisfied.
311. See id. In sum, neither the number of principals, the diversity of their interests, nor the fact that their control over their representative is indirect dispositively precludes a finding that agency exists.
312. See Lukes v. Dep't of Pub. Welfare, 976 A.2d 609, 622-24 (Pa. Commw. Ct. 2009) (finding that agreements between a nonprofit health plan and the state were products of an agency relationship).
313. The seminal work in this field was written in 1963. See Kenneth J. Arrow, Uncertainty and the Welfare Economics of Medical Care, 53 AM. ECON. REV. 941 (1963).
314. See Mandy Ryan, Agency in Health Care: Lessons for Economists from Sociologists, 53 AM. J. ECON. & SOC. 207, 207 (1994) (arguing that the concept of agency is widely accepted). (Pubitemid 24780313)
315. But cf Gavin Mooney & Mandy Ryan, Agency Principles in Health Care: Getting Beyond First Principles, 12 J. HEALTH ECON. 125, 125 (1993) (arguing that agency theory raises more questions than supplies answers when applied to physician-patient relations).
316. Gavin Mooney, Communitarianism and Health Economics, in THE SOCIAL ECONOMICS OF HEALTH CARE 40, 43-44 (John B. Davis ed., Routledge 2001).
317. See, e.g., SHERMAN FOLLAND ET AL., THE ECONOMICS OF HEALTH AND HEALTH CARE 206 (5th ed. 2007).
318. See generally Michael C. Jensen & William H. Meckling, Theory of the Firm, 3 J. FINANCIAL ECON. 305, 305-60 (arguing that separation of ownership and control leads to conflict of interest).
319. FOLLAND et AL., supra note 230, at 207.
320. See Einat Neuman & Shoshana Neuman, Agency in Health-care: Are Medical Care-givers Perfect Agents?, CTR. FOR ECON. POLICY RESEARCH (Discussion Paper Series No. 6612) (2007), www.cepr.org/pubs/dps/DP6612.asp. Using Discrete Choice Experiments, the authors evaluated the preferences of 323 women who had recently given birth with respect to privacy of rooms, attitude of staff, professionalism of medical staff, information availability, and travel time to the hospital, and then compared their preferences to thirty staff members of a large Israeli public hospital.
321. Id. at 4-5. From the observed differences in these two groups' preferences, the authors conclude that "[t]he clear empirical finding is that the agent has a biased perception of the principal's preferences and therefore perfect agency does not exist.... [Therefore] [i]nforming the unaware medical care-givers about the patients' preferences, will improve treatment and patients' satisfaction. "
322. Id. at 8.
323. See id.
324. Eduardo Bruera et al., Patient Preferences Versus Physician Perceptions of Treatment Decisions in Cancer Care, 91 J. CLINICAL ONCOLOGY 2883 (2001);
325. Mark Ebell et al., The Do-Not-Resuscitate Order: A Comparison of Physician and patient Preferences and Decision-Making, 91 AM. J. OF MED. 255 (1991) (noting similarities and differences between physicians and patients in making DNR decisions).
326. "In the area of provider reimbursement, the provider, acting as an agent, faces two principals: the patients and, when there is health insurance, the insurers." PHILIP JACOBS & JOHN RAPOPORT, THE ECONOMICS OF HEALTH AND MEDICAL CARE 148 (5th ed. 2004).
327. See generally David Dranove & William D. White, Agency and the Organization of Health Care Delivery, in II HEALTH ECONOMICS: CRITICAL PERSPECTIVES IN THE WORLD ECONOMY 233, 235-45 (Anthony J. Culyer ed., 2006).
328. See id. at 236.
329. See id. at 241-43.
330. JACOBS & RAPOPORT, supra note 235, at 87.
331. Managed Care Fact Sheets-National Statistics, MCOL, http://www.mcareol. com/factshts/factnati.htm (last visited Apr. 16, 2010);
332. Paul Mackun & Steven Wilson, Population Distribution and Change: 2000 to 2010, U. S. CENSUS BUREAU (Mar. 2011), http://www.census.gov/prod/cen2010/ briefs/c2010br-01.pdf.
333. Physician practice patterns have changed to meet the needs of the new provider environment. The number of solo practice physicians is declining, and physicians are aggregating into larger groups and providing care in multiple specialties. In 2004-2005, the proportion of physicians in solo or two-physician practices had decreased to 32.5%, down from 40.7% in 1996-1997. COUNCIL ON LONG RANGE PLANNING & DEV., AM. MED. ASSOC, HEALTH CARE TRENDS 2008, at 57 (2008). In 1996 physician practices with eleven or more physicians represented 15.6% of all office-based doctors.
334. Id. By 1999, that percentage had increased to 18.5% of all office-based practices.
335. Id. This trend of physicians concentrating within a single practice group increases the likelihood that physicians will share patients rather than remain in a single physician-patient relationship. Clearly, the physician-patient relationship that stands at the core of the agency model that we have been discussing up to this point has changed to a larger, more complex interaction.
336. Dayna Bowen Matthew, Controlling the Reverse Agency Costs of Employment-Based Health Insurance, 31 WAKE FOREST L. REV. 1037, 1038 (1996).
337. Id. at 1039.
338. Rodwin, supra note 70, at 253.
339. Id. at 255 (pointing to a growing scholarship advocating that we dispense with fiduciary obligations in favor of determining obligations by contract).
340. Dranove & White, supra note 236, at 239.
341. SeeJACOBS & RAPOPORT, supra note 235, at 148.
342. GETZEN, supra note 223, at 175.
343. Id.
344. See id. at 174-75.
345. See Health, United States, 2010, U. S. DEP'T OF HEALTH AND HUMAN SERVS., 372 tbl.113 (2010), http://www.cdc.gov/nchs/data/hus/huslO.pdf (last visited Apr. 10, 2011) [hereinafter Health, United States, 2010].
346. Fred Joseph Hellinger, Tax-Exempt Hospitals and Community Benefits: A Review of State Reporting Requirements, 34 J. HEALTH POL'Y & L. 37 (2009);
347. see also James E. Tyrell, III, Non-Profits Under Fire: The Effects of Minimal Charity Requirements Legislation on Not-for-Profit Hospitals, 26 J. CONTEMP. HEALTH L. & POL'Y 373 (2010);
348. L. Seaton et al., Tax Exempt Hospitals and Community Benefit, 21 HEALTH LAW 37 (2009).
349. JACOBS & RAPOPORT, supra note 235, at 154-156.
350. See id.
351. Jennifer Arlen & W. Bentley MacLeod, Malpractice Liability for Physicians and Managed Care Organizations, 78 N. Y. U. L. REV. 1929, 1976 (2003);
352. Dionne Roller Fine, Physician Liability and Managed Care: A Philosophical Perspective, 19 GA. ST. U. L. REV. 641, 647 (2003).
353. GETZEN, supra note 223, at 216.
354. Matthew, supra note 242, at 1037.
355. See id. at 1038.
356. David S. Law, A Theory of Judicial Power and Judicial Review, 97 GEO. L. J. 723, 723 (2009).
357. I am indebted to Drs. Paul Miller and Charles Weijer for the outline of my argument in this section; I found their argument persuasive in Fiduciary Obligation in Clinical Research, 34 J. L. MED. & ETHICS 424 (2006).
358. Law, supra note 259, at 723.
359. See Akhil Reed Amar, The Bill of Rights as a Constitution, 100 YALE L. J. 1131, 1132 (1991).
360. Akhil Reed Amar, Of Sovereignty and Federalism, 96 YALE L. J. 1425, 1432-33 (1987).
361. Id. at 1433.
362. Id. at 1434.
363. See Marshall, supra note 16, at 211.
364. Carlos E. González, Reinterpreting Statutory Interpretation, 74 N. C. L. REV. 585, 636 (1996).
365. Amar, supra note 263, at 1433 (quoting Chisholm v. Georgia, 2 U. S. (2 Dall.) 419, 447 (1793) (opinion of Iredell, J.)).
366. Id. at 1433-34.
367. Id.
368. Gonzalez, supra note 267, at 637 (statutory and regulatory references added).
369. See GETZEN, supra note 223, at 349.
370. Id. at 334.
371. It is beyond the scope of this article to explore the causes of action that may be brought against the state for breach of fiduciary duty owed to citizens. However, these actions are bound to arise if the fiduciary medicine model is adopted. Courts may be guided by the rich body of case law that describes lawsuits brought by Native Americans against the government to recover for breach of fiduciary obligations that the government owes in managing land. See, e.g., Mitchell v. United States, 664 F.2d 265 (Ct. C1. 1981).
372. Deborah A. DeMott, Beyond Metaphor: An Analysis of Fiduciary Obligation, 1988 DUKE L. J. 879 (1988).
373. Id.
374. See id. at 885-88.
375. See id. at 879-80.
376. Id. at 880.
377. Id. at 915.
378. See Frankel, supra note 138, at 808.
379. See Melvin A. Eisenberg, The Duty of Good Faith in Corporate Law, 31 DEL. J. CORP. L. 1 (2006).
380. Id. at 26.
381. Id. at 29.
382. Id. at 30-31.
383. Id. at 38.
384. Id. at 50-51.
385. Id. at 38.
386. Health, United States, 2010, supra note 251, at 387-88 tbl.125.
387. Id. at 369-70 tbl.125.
388. Id. at 32 & fig.23, 371-72 tbl.126.
389. Id. at 371-72 tbl.126.
390. See, e.g., GETZEN, supra note 223, at 335 (describing the primary sources of government funds in 1997).
391. See Health, United States, 2010, supra note 251, at 369-70 tbl.125 & n. 2 (referring to public health services as "[government public health activities" in table 125).
392. Id.
393. Letter from Kathleen M. King & George A. Scott, GAO Graduate Med. Educ. (GAO-09-438R), to The Hon. George Miller et al., House of Representatives 1-6 (May 4, 2009) (available at http://www.gao.gov/new.items/d09438r.pdf).
394. Id. at 1-2.
395. See 42 U. S. C. A. § 1320e (West Supp. 2010) (establishing the Patient-Centered Outcome Research Institute);
396. see also 26 U. S. C. A. § 9511 (West Supp. 2010) (establishing a Patient-Centered Outcome Research Trust Fund).
397. JOHN M. EISENBERG, AGENCY FOR HEALTHCARE RESEARCH AND QUALITY, QUALITY RESEARCH FOR QUALITY HEALTH CARE, available at http://www.ahrq.gov/about/qr4qhc/ qr4qhc-1.htmdirector.
398. See Republic of Rwanda v. Uwimana (In re Uwimana), 274 F.3d 806 (4th Cir. 2001), which held that: An agent must avoid conflicts of interests with his or her principal and "[i]f the agent is to receive any benefit from a transaction in which he is serving his principal, the agent must fully disclose any interest he has in the transaction and receive the consent of his principal to proceed, even if the principal ultimately was to benefit from the transaction. "
399. Id. at 812 (quoting Gussin v. Shockey, 725 F. Supp. 271, 275 (D. Md. 1989)).
400. Id. at 808-09.
401. Id. at 811.
402. Id. at 812.
403. Id.
404. For one hundred days beginning in early April 1994, and continuing through July 1994, the Hutu government of Rwanda conducted a brutal and systematic mass killing of the country's Tutsi population and their Hutu sympathizers, assassinating between 500, 000 and 1, 000, 000 people in a genocide that wiped out nearly three-quarters of the Tutsi population in Rwanda. See ALISON DESFORGES, LEAVE NONE TO TELL THE STORY: GENOCIDE IN RWANDA 6, 17-18 (1999).
405. J. Gregory Dees, Principals, Agents, and Ethics, in ETHICS AND AGENCY THEORY 25, 31 (Norman E. Bowie & R. Edward Freeman eds., 1992).
406. Id. at 35. I focus here on the second and third biases that Professor Dees identifies. However, the implications of Professor Dees' first and second biases also have significant importance to the fiduciary medicine model. They deserve further attention than can be provided here. In fact, the principal-agency relationship in health care should not be understood as a series of one-way obligations flowing only from providers and financiers to the patient population. The responsibilities of the principal owed to the agents in this model are significant. The agency model can accommodate these as well. The Restatement (Third) of Agency § 8.15 (2006) describes the principal's duty to deal fairly and in good faith with the agent and to provide information to the agent about risks of harm or financial loss. These duties obligate patients to exercise personal responsibility for their own health care, to conserve financial resources in consuming health care, and provide the legal limitations on agents' liability for harms unknown to them. The Restatement explains that the "agency-law duties of principals to their agents are less numerous than the duties of agents to principals... because an agent's position always enables the agent to take action with consequences for the principal's legal relations..."
407. RESTATEMENT (THIRD) of AGENCY § 8.13 intro. note (2006). However, Dees' caution that the law must not excessively distrust and burden agents alone is indeed applicable to the fiduciary medicine model as well. 308. See infra Section I. A. I.
408. Nicolas P. Terry, Physicians and Patients Who "Friend" and "Tweet": Constructing a Legal Framework for Social Networking in a Highly Regulated Domain, 43 IND. L. REV. 285, 304 (2010)).
409. See, e.g., Gary A. Varnavides, The Flawed State of Broker-Dealer Regulation and the Case for an Authentic Federal Fiduciary Standard, 16 J. CORP. AND FIN. L. 203, 211 (2011).
410. Dees, supra note 305, at 33. In Dees' analysis, Level 1 questions ask what agreements would best serve the individual interests of the principal and agent parties to a fiduciary relationship. Id. at 31. Level 2 questions ask what joint solutions the parties to a fiduciary relationship would bargain to reach between or among them.
411. Id. Level 3 questions go to the moral gap that usually occurs, according to Dees, as a result of applying the principal-agent model as a heuristic, as I have done here, without refining the model to correct for the ethical biases inherent in it.
412. Id. This discussion addresses the moral gap that Dees has identified.
413. Hall, supra note 102, at 504.
414. See 42 U. S. C. A. § 1395 jjj (a) (West Supp. 2010);
415. see also supra note 113 and accompanying text.
416. Id. § 1395jjj (b) (1)-(2).
417. Id. § 1395jjj (d) (1) (B).
418. Id. § 1395jjj (d) (1) (B) (ii).
419. Id. § 1395jjj (i) (2).
420. Id. § 1395jjj (d) (1) (B).
421. Id. § 1395jjj (i) (3).
422. See MEDPAC, REPORT TO THE CONGRESS: IMPROVING INCENTIVES IN THE MEDICARE PROGRAM 39-42 (June 2009), available at http://www.medpac.gov/documents/jun09- entirereport.pdf;
423. KELLY DEVERS & ROBERT BERENSON, URBAN INST., CAN ACCOUNTABLE CARE ORGANIZATIONS IMPROVE THE VALUE OF HEALTH CARE BY SOLVING THE COST AND QUALITY QUANDARIES? 7 (2009), available at http://www.urban.org/UploadedPDF/411975- acountable-care-orgs.pdf;
424. Steven M. Shortell & Lawrence P. Casalino, Health Care Reform Requires Accountable Care Systems, 300 J. AM. MED. Ass'N 95, 97 (2008).
425. 42 U. S. C. A. § 256a-1 (c) (2) (West Supp. 2010). Title III, Section 3502 of the ACA defines patient-centered medical homes as: a mode of care that includes-(A) personal physicians or other primary care providers; (B) whole person orientation; (C) coordinated and integrated care; (D) safe and high-quality care through evidenceinformed medicine, appropriate use of health information technology, and continuous quality improvements; (E) expanded access to care; and (F) payment that recognizes added value from additional components of patient-centered care.
426. Id.
427. Id. § 1395cc-4 (a) (1).
428. See id. § 1395ww.
429. See id.
430. See Hall, supra note 102, at 504.
431. Id. at 490;
432. see also RESTATEMENT (THIRD) OF AGENCY § 8.06 (2) (2006).
433. See RESTATEMENT (THIRD) OF AGENCY § 8.06 (2) cmt. d (2006).
434. Id. § 8.06.
435. Id. § 8.06 (2) (b) (i) - (ii).
436. Id. § 8.06 (2) (a).
437. 235 S. W.3d 695 (Tex. 2007).
438. Id. at 697. The lower appellate court agreed with the plaintiffs claims, holding that the defendant administrator owed a fiduciary duty to the plaintiff insurer, and that the defendant's burden to show its fiduciary obligation to show fairness in the transaction with the subsequent purchaser-a second principalhad not been discharged.
439. See Nat'l Plan Adm'rs, Inc. v. Nat'l Health Ins. Co., 150 S. W.3d 718, 730-32 (Tex. Ct. App. 2004)
440. rev'd, 235 S. W.3d 695 (Tex. 2007).
441. Although the Texas Supreme Court overruled that decision, finding that the Texas Insurance Code did not place a fiduciary burden on the defendant thirdparty administrator, the lower court's description of the duties that an agent owes in representing multiple principals, as well as the cases cited are helpful for future cases in which a fiduciary obligation does exist.
442. Nat'l Plan Adm'rs, 235 S. W.3d at 700-04.
443. Nat'l Plan Adm'rs, 150 S. W.3d at 724.
444. Id. at 727.
445. Id. at 727-28.
446. Id. at 728.
447. Id. at 729.
448. Id.
449. Nat'l Plan Adm'rs, 235 S. W.3d at 701, 704. In the main, this holding was based on the court's finding that the Texas Insurance Code did not place a fiduciary duty on third-party administrators. However, in its analysis of other fiduciary duties the defendant owed to its principal insurer, the court provided helpful insight concerning the law pertaining to dual agencies.
450. See id.
451. See id.
452. Note that not all relationships between a physician and a payer are agency relationships. For example, a physician may have no contractual connection to a patient's insurer whatsoever, and thus may not be held to represent that payer in an agency relationship. On the other hand, payers who selectively contract with physicians and through a master or operating agreement impose financial and other incentives to contain costs are acting as principals exercising some degree over physicians as their agents.
453. Nat'l Plan Adm'rs, 235 S. W.3d at 700.
454. Id.
455. Id. at 702 ('"This section makes the basic point that an agent's duties of performance to the principal are subject to the terms of any contract between them."')
456. (quoting RESTATEMENT (THIRD) OF AGENCY § 8.07 cmt. a (2006)).
457. "Accordingly, factors which must be taken into consideration when determining the scope of an agent's fiduciary duty to his or her principal include not only the nature and purpose of the relationship, but also agreements between the agent and principal."
458. Id. at 700.
459. Id. at 700-02.
460. See id. at 700-01.
461. Id.
462. Id. at 701.
463. Id. at 702.
464. See Hall, supra note 102, at 504.
465. See, e.g., Arthur D. Little Int'l, Inc. v. Dooyang Corp., 928 F. Supp. 1189, 1208 (D. Mass. 1996) (discussing how disclosure to the principal of a conflict of interest in accordance with duty did not absolve the firm of "all other fiduciary duties as an agency");
466. Kirkruff v. Wisegarver, 697 N. E.2d 406, 411 (Ill. App. Ct. 1998) (discussing the burden to show full disclosure of all relevant information to the principal before entering a transaction and the duty to still render "competent and independent advice to the principal");
467. Lane v. Oustalet, 873 So. 2d 92, 99 (Miss. 2004) (holding that a dual agent has "separate burdens" to each principal);
468. see also RESTATEMENT (THIRD) OF AGENCY §§ 3.14, 3.15 (2006) (regarding the hierarchy of duties to multiple agents and sub-agents).
469. See RESTATEMENT (THIRD) OF AGENCY § 8.02 (2006).
470. Jaime Staples King & Benjamin W. Moulton, Rethinking Informed Consent: The Case for Shared Medical Decision-Making, 32 AM. J. L. & MED. 429 (2006).
471. See Alan Meisel, From Tragedy to Catastrophe: Lawyers and the Bureaucratization of Informed Consent, 6 YALE J. HEALTH POL'Y & ETHICS 479, 480-82 (2006).
472. See 42 U. S. C. A. §§ 299b-33 to-34 (West Supp. 2010).
473. See Matthew, supra note 125.
474. See id.
475. see also Carl E. Schneider, After Autonomy, 41 WAKE FOREST L. REV. 411, 417-25 (2006) (reviewing empirical literature that shows that physicians do not effectively inform and patients do not adequately understand what is going on in the informed consent conversation).
476. Peter Schuck first noted the "informed consent gap" in 1994.
477. See Peter H. Schuck, Rethinking Informed Consent, 103 YALE L. J. 899, 903-04 (1994). Many have suggested expansion of the scope of the physician's duty to fill this gap.
478. See, e.g., Mark A. Hall, A Theory of Economic Informed Consent, 31 GA. L. REV. 511 (1997);
479. Frances H. Miller, Health Care Information Technology and Informed Consent: Computers and the Doctor-Patient Relationship, 31 IND. L. REV. 1019 (1998). Some urged that a greater focus on patient autonomy would fix the problem.
480. See, e.g., Mary Anne Bobinski, Autonomy and Privacy: Protecting Patients from Their Physicians, 55 U. PITT. L. REV. 291 (1994). But when jurists did train a focused eye on patient autonomy, others called "the suffocating hegemony of the autonomy principle" a failing policy.
481. See Schneider, supra note 357, at 413.
482. See, e.g., Moore v. Webb, 345 S. W.2d 239, 243 (Mo. Ct. App. 1961);
483. Tracy v. Merrell Dow Pharm., Inc., 569 N. E.2d 875, 879 (Ohio 1991);
484. Hunter v. Brown, 484 P.2d 1162, 1166 (Wash. Ct. App. 1971).
485. State legislatures could also revise existing informed consent statutes to reflect agency rather than negligence law principles. as an illustration, take for example the Florida statute entitled the "Florida Medical Consent Law."
486. FLA. STAT. § 766.103 (2005 & Supp. 2011) (codifying the common law informed consent doctrine). Should the Florida legislature wish to replace the negligence principles underlying this law, lawmakers could revise the language in paragraphs (a) (1) and (a) (2) to prohibit action for failure to obtain informed consent against the providers protected under the statute who had acted in the best interest of their patients, fulfilled their duties to act loyally for the patient's benefit, and subordinated their own interests and the interests of third parties to the interest of the patient. Further, the statute might obligate providers to honor their duty of confidentiality in all communication, and to act with care, competence, and diligence. The difference would be that these provisions would not refer to the reasonableness standard of care defined by the medical community, but would instead depend upon standards of agency law that have construed these terms in other agency contexts.
487. See, e.g., Rookard v. Mexicoach, 680 F.2d 1257, 1261-63 (9th Cir. 1982) (holding that a travel agent who is not "a mere ticket-agent" has a duty to a customer to "warn of those dangers of which he is aware, or should be aware" because of the dependent relationship).
488. RESTATEMENT (THIRD) OF TRUSTS § 90 (2007).
489. See RESTATEMENT (THIRD) OF AGENCY § 8.15 (2006) ("A principal [must] provide the agent with information about risks of physical harm or pecuniary loss that the principal knows, has reason to know, or should know are present in the agent's work but unknown to the agent.").
490. 42 U. S. C. A. § 299b-36 (West Supp. 2010).
491. Id. § 299b-36 (b) (1). 366. Id. §§ 299b-36 (c) - (d). 367. Id. § 299b-36 (e). 368. Id. § 299b-36 (a). 369. Id. §§ 299b-36 (c) - (d). 370. See id. § 299b-36 (b) (2).
492. See RESTATEMENT (THIRD) OF TRUSTS § 90 (2007).
493. John H. Langbein, The Uniform Prudent Investor Act and the Future of Trust Investing, 81 IOWA L. REV. 641, 641 & n. 3 (1996).
494. See id. at 641.
495. See RESTATEMENT (THIRD) OF TRUSTS § 90 (2007).
496. See id.
497. See supra Part II. B.1.
498. See GEORGE GLEASON BOGERT ET AL., THE LAW OF TRUSTS AND TRUSTEES § 612 (2009).
499. See, e.g., Langbein, supra note 372, at 669 (describing the overall impact of the new uniform act in positive terms and declaring it a "giant first step"). Langbein described some of the act's likely consequences as "unsettling".
500. Id. at 643.
501. BOGERT et AL., supra note 373, §§ 616-666;
502. see also MARILYN E. PHELAN, NONPROFIT ENTERPRISES: CORPORATIONS, TRUSTS, AND ASSOCIATIONS § 4.15 n. 1 (2000 & Supp. 2009).