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International Law, Telemedicine & Health Insurance: China as a Case Study

Published online by Cambridge University Press:  06 January 2021

Thomas R. McLean
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Whosoever commands the trade of the world commands the riches of the world and hence the world itself.

Sir Walter Raleigh

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Article
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American Journal of Law & Medicine , Volume 32 , Issue 1 , March 2006 , pp. 7 - 51
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Copyright © American Society of Law, Medicine and Ethics and Boston University 2006

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Footnotes

†

Nothing in this paper is to be construed as representing Veterans Administration policy or procedure. Corporations and universities names in this paper are used for illustrative value. While the basic facts about the corporations and universities are cite in the footnotes, inferred behavior of these organization is speculation on my part. None of my comments concerning business practices of these organization should be construed as representing actual business practices.

References

1 ROLLERBALL (United Artists 1975)

2 THOMAS L. FRIEDMAN, THE WORLD IS FLAT (Farrar, Strass, & Giroux 2005); KENNETH OHMAE, THE NEXT GLOBAL STAGE (Wharton School Publishing 2005).

3 See Economist.com, Economics A-Z, http://www.economist.com/research/Economics/alphabetic.cfm?TERM=COMPARATIVE%20ADVANTA GE#COMPARATIVE%20ADVANTAGE (last visited Feb. 15, 2006) (this economic theory postulates that two countries will be economically better off in the long run if both countries specialize in exclusively producing a product or service for trade with the other country).

4 Steven Suranovic, The Theory of Comparative Advantage – Overview, http://internationalecon.com/v1.0/ch40/40c000.html (last updated Aug. 20, 2003) (discussing the onerous set of conditions that must exist for comparative advantage to operate as theorized).

5 Ohmae, supra note 2.

6 This assumption does not reflect reality. Even with a nominal policy of one-child per family, China's population is growing at a rate of 10 million people (roughly the population of Belgium) per year. Hesketh, Therese, Lu, Li & Xing, Zhu Wei, The Effect of China's One Child Family Policy After 25 Years, 353(11) N. ENGL. J. MED. 1171, 1174 (2005)CrossRefGoogle ScholarPubMed.

7 Even if the number of future city-states were substantially decreased by the formation of leagues (or confederations) or by using a larger population figure, a lack of a strong central decisionmaking body would result in the collapse of the league system. See GARRY WILLS, JAMES MADISON 28 (Time Books 2002) (citing James Madison, Notes on Ancient and Modern Confederacies (1787)).

8 See generally McLean, Thomas R., The Future of Telemedicine & its Faustian Reliance on Regulatory Trade Barriers for Protection, 18 HEALTH MATRIX (Forthcoming 2006)Google Scholar [hereinafter Future of Telemedicine]; McLean, Thomas R., The Offshoring of American Medicine: Scope, Economic Issues, and Liability, 14 ANN. HEALTH L. 205 (2005)Google Scholar [hereinafter Offshoring]; cf. GENERAL ACCOUNTING OFFICE, OFFSHORING OF SERVICES: AN OVERVIEW OF THE ISSUES. GAO-06-5 (Nov. 2005), http://www.gao.gov/new.items/d065.pdf (noting that there is no certainty to future being ushered in by the economic forces associated with globalization).

9 McLean, Thomas R., Automatic Cybersurgery: Innovation or a Means to Close Community Hospitals and Displace Physicians?, 20 JOHN MARSHALL J. COMPUTER & INFO. L. 495, 513 (2002)Google Scholar [hereinafter Automatic Cybersurgery].

10 See Mutchnick, Ian S., Stern, David T. & Moyer, Cheryl A, Trading Health Services Across Borders: GATS, Markets, and Caveats, HEALTH AFFAIRS, Jan. 25, 2005Google Scholar, http://content.healthaffairs.org/cgi/content/full/hlthaff.w5.42/DC1; DEBRA J. LIPSON, GATS AND TRADE IN HEALTH INSURANCE SERVICES: BACKGROUND NOTE FOR WHO COMMISSION ON MACROECONOMICS IN HEALTH (June 2001), http://www.eldis.org/static/DOC9289.htm.

11 Conceptually, the scope of the capital market is broad, covering such things as stocks, bonds, venture capital and other more esoteric transactions. KARL F. SEIDMAN, ECONOMIC DEVELOPMENT FINANCE 3-19 (2004). Because the insurance and investment banking industries are key players in this market and are the real concern of this paper, the use of term “capital markets” herein is used in a limited and non-technical sense to refer to the movement of money or financial instruments by insurers and investment bankers.

12 Blair D. Gifford & David Wood, American Hospital Firms and the Burgeoning Chinese Private Health Market, in INTERNATIONAL HEALTH CARE MANAGEMENT 19 (Grant Savage, Jon A Chilingerian, & Michael Powell eds., 2005).

13 Although the focus of this paper is on telemedicine, the principles articulated here, with some modifications, are equally applicable to overseas expansion via a franchise bricks-and-mortar model that is currently being used by premier healthcare providers. See HEALTH MATRIX, supra note 8.

14 The globalization of the practice of medicine involves more that the expansion of private markets; it also involves a public health component that is concerned with the dissemination of communicable disease and providing a social safety net to those individuals without insurance. See Frenk, Julio & Gomez-Dantes, Octavio, Globalization and the Challenges to the Health Systems, 21 HEALTH AFF. 160 (2002)CrossRefGoogle ScholarPubMed.(the globalization of the public health arena, however, with or without telemedicine, is beyond the scope of this article).

15 Although all of the examples in this paper are based on the situation in China, with slight modifications, these examples could be applied to other developing countries. China was selected because of the potential size of its healthcare market and the fact that information concerning this market is readily available.

16 World Trade Organization, General Agreement on Trade in Services, Apr. 15, 1994, http://docsonline.wto.org/GEN_searchResult.asp?RN=0&searchtype=browse&q1=%28@meta_Symbol+LTüURüA-1BüSü1%29+%26+%28@meta_Types+Legal+text%29" [hereinafter GATS].

17 New York Convention, Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 330 U.N.T.S. 4739 (1959).

18 A related topic in international law, but one beyond the scope of this article, concerns the choice-of-law clause in contracts between parties from different countries. See O'Hara, Erin Ann, Opting Out of Regulation: A Public Choice Analysis of Contractual Choice of Law, 53 VAND. L. REV. 1551 (2000)Google Scholar (examining choice-of-laws from a law-in-economics point of view); Symeonides, Symeon C., Choice of Law in the American Courts in 2004: Eighteenth Annual Survey, 52 AM. J. COMP. L. 919 (2004)CrossRefGoogle Scholar (discussing international choice-of-law cases); Watt, Horatia Muir, Choice of Law in Integrated and Interconnected Markets: A Matter of Political Economy, 9 COLUM. J. EUR. L. 383 (2003)Google Scholar (see the potential for a “race-to-the-bottom” as countries compete for market by enacting favorable laws); Wiegand, Shirley A., Fifty Conflict of Laws “Restatements“: Merging Judicial Discretion and Legislative Endorsement, 65 LA. L. REV. 1 (2004)Google Scholar (discussing the rule for resolving choice-of-laws conflicts).

19 Thomas Friedman, A Manifesto for the Fast World, N.Y. TIMES, March 28, 1999, at 40.

20 Videotape: Milestones in Open Heart Surgery (St. Jude Medical 1988) (on file with author).

21 Heart Lung Machine – John Heysham Gibbon, About.com, http://inventors.about.com/library/inventors/blheartlungmachine.htm (last visited Feb. 26, 2006).

22 The epidemic of smoking-related lung cancer cases not did occur until the 1960s. Lynn T. Tanoue & Richard A. Matthay, Lung Cancer: Epidemiology and Carinogenesis, in THORACIC SURGERY 1215-1218 (Thomas W. Shields ed., Lippincott Williams & Wilkins 2000). Even this epidemic, however, did not bring full employment back to thoracic surgeons because only about 25% all new cases of lung cancer are candidates for operation. Id.

23 Streptomycin was the first effective medical treatment for tuberculosis. Streptomycin – Encyclopedia Britannica, http://www.britannica.com/eb/article-9069959#cite (last visited Feb. 26, 2006).

24 LARRY W. STEPHENSON, STATE OF THE HEART 21 (Jon VanZile ed., Write Stuff Syndicate 1999).

25 Id.

26 Technically it was possible to perform some operations on heart conditions without the cardiopulmonary bypass pump; however, these operations were fraught with peril. See Khan, Mohammed Nasir, The Relief of Mitral Stenosis: An Historic Step in Cardiac Surgery, 23 TEX. HEART INST. J., 258 (1996)Google ScholarPubMed.

27 William B Kannel & Thomas B. Thom, Incidence Prevalence, and Morality of Cardiovascular Disease, in THE HEART 563-564 (J. Willis Hurst ed., McGraw Hill 6th ed. 1986). Presumably many of the most severe cases of congenital heart disease result in intra-utero death.

28 Cardiovascular Disease Statistics, http://www.americanheart.org/presenter.jhtml?identifier=4478 (last visited Feb. 19, 2006). Each year approximately 1.2 million individuals sustain a new or recurrent heart attack due to coronary artery disease. Id

29 Shiroishi, Mark S., Myocardial Protection, 26(1) TEX HEART INST J. 71, 79 (1999)Google ScholarPubMed.

30 Other examples of physicians reinventing themselves to enter a new market after an old market has collapsed include general surgeons becoming bariatric surgeons to capitalize on the obesity epidemic, and internists reinventing themselves as hospitalists to capitalize on a new market that appeared when cost-driven competition destroyed the traditional practice of internal medicine.

31 CM Christensen, R Bohmer & J Kenargy, Will Disruptive Innovations Cure Health Care, HARV. BUS. REV. 103, 104 (Sept-Oct. 2000)

32 Angioplasty.com, Angioplasty/PTCA History, http://www.ptca.org/history_timeline.html. (last visited Feb. 26, 2006). Beyond the discussion of this article are many other disruptive innovations which either reduce the incidence of coronary artery disease or else reduce the incidence of recurrent stenosis after PTCA.

33 See Parisi, Alfred F, Clinical Trials of Coronary Revascularization for Chronic Stable Angina: Medical Treatment Versus Coronary Revascularization, 15 CURRENT OPINION IN CARDIOLOGY 275 (2000)CrossRefGoogle ScholarPubMed (a review article on PTCA and CABG outcomes).

34 Aoki, J. et al., Five Year Clinical Effect of Coronary Stenting and Coronary Artery Bypass Grafting in Renal Insufficient Patients with Multivessel Coronary Artery Disease: Insights from ARTS Trial, 26 EUR. HEART J. 1488 (2005)CrossRefGoogle ScholarPubMed; Rodriguez, AE et al, Five Year Follow-Up of the Argentine Randomized Trial of Coronary Angioplasty With Stenting Versus Coronary Bypass Surgery in Patients With Multiple Vessel Disease (ERACI II), 46 J. AM. C. CARDIOLOGY5 82 (2005)Google Scholar (no difference in 5-year survival or incidence of infarction in patients with multi-vessel coronary disease who were managed by drug eluding stents or CABG); Serruys, PW et al., Five-Year Outcomes After Coronary Stenting Versus bypass Surgery for the Treatment of Multivessel Disease, 46 J. AM. C. CARDIOLOGY 575 (2005).CrossRefGoogle ScholarPubMed

35 Vandewater, J, Bypassing Surgery, ST. LOUIS POST-DISPATCH, Aug. 21, 2005,Google Scholar at E1.

36 Lytle, Bruce & Mack, Michael, The Future of Cardiac Surgery: The Times, They Are a Changin’, 79 ANN. THORAC. SURG. 1470, 1470-1471 (2005)CrossRefGoogle ScholarPubMed. In fairness to my brethren surgeons, the specialty of cardiac surgery is not likely to entirely vanish in the foreseeable future. The cumulative effect of multiple disruptive innovations for managing coronary artery disease, however, will mean that the number of future cardiac surgeons needed per capita will be de minimus compared to the volume of cardiac surgeons today.

37 Martin Plüss, Settlement and Work in Areas with Nomadic Communities, http://hsc.csu.edu.au/pta/gtansw/publications/archive/nomads.html (last visited Feb. 26, 2006) (observing that the characteristic finding of a nomadic society is the need for “periodic movement to sustain [its] livelihood).

38 Bryan Walsh, Asia's War with Heart Disease, TIME ASIA, May 10, 2004, http://www.time.com/time/asia/magazine/article/0,13673,501040510-632135,00.html.

39 More generally, China needs individuals with advanced degrees of all types, and is actively recruiting those who hold such degrees. French, Howard W., China Luring Foreign Scholars to Make Its Universities Great, N.Y. TIMES, Oct. 28, 2005,Google Scholar at A1.

40 See infra Part II(C)(1).

41 See infra Part II(B).

42 Telemedicine may soon be available in rural China via satellite transmission. See Telemedicine Meet to Focus on Cheaper Healthcare, BUS. LINE (India), Feb. 27, 2005, available at 2005 WLNR 2999829.

43 See McLean, Thomas R., Crossing the Quality Chasm: Autonomous Physician Extenders Will Necessitate a Shift to Enterprise Liability Coverage for Health Care Delivery, 12 HEALTH MATRIX 239, 257-258 (2002)Google ScholarPubMed (discussing post-college training for physicians).

44 Most Chinese physicians have only a bachelor's degree and lack the fundamental knowledge to understand common medical conditions like hepatitis. Chen Zhiyong, Doctors Not up to Scratch on Hepatitis, CHINA DAILY, Sep. 29, 2005Google Scholar, available at 2005 WLNR 22558698.

45 See e.g., THE CHINESE MEDICAL JOURNAL (TAIPEI), available at http://www.vghtpe.gov.tw/∼cmj/; THE CHINESE MEDICAL JOURNAL available at http://www.cmj.org/.

46 For the purposes of this paper, I am simplifying the market analysis by assuming that China does not substitute invasive cardiologists for cardiac surgeons. A discussion of substitution in economic analysis is beyond the scope of this paper.

47 China has already demonstrated a willingness to import people to fill positions that require significant levels of education; China appears to be committing its economy to the production of goods. See French, Howard W., India and China Take on the World and Each Other, N.Y. TIMES, Nov. 8, 2005Google Scholar, at C9.

48 A related question is at what level reimbursement should be set. Today there is a huge discrepancy in the income of surgeons in China as compared to the U.S.; the average physician in China earns only $3000 / year. Sharon Bahrych, An Outsider's View of Chinese Medicine, ADVANCE FOR PHYSICIAN ASSISTANTS, Sept. 1, 2005, at 74, http://physicianassistant.advanceweb.com/common/EditorialSearch/AViewer.aspx?AN=PA_05sep1_pap74.html&AD=09-01-2005.

49 The problem with spoken language skills in Chinese is that, while there is only one standard written language, there are multiple spoken dialects that are mutually incomprehensible. See generally MARK SALZMAN, IRON AND SILK (Vintage 1987) (someone who speaks Mandarin Chinese generally cannot be understood by someone who speaks Cantonese Chinese).

50 GLORIA ZHANG LIU, CHINESE CULTURE AND DISABILITY: INFORMATION FOR U.S. SERVICE PROVIDERS 8 (John Stone ed., Center for International Rehabilitation Research Information and Exchange monograph series 2001), http://cirrie.buffalo.edu/monographs/china.pdf.

51 Automatic Cybersurgery, supra note 9, at 513; McLean, Thomas R., Cybersurgery: An Argument for Enterprise Liability, 23 J. LEGAL MED. 167, 168 (2002)CrossRefGoogle ScholarPubMed [hereinafter Enterprise Liability].

52 Lydia Dotto, Long-distance Surgery, GLOBE & MAIL (Toronto), Oct. 2, 2004, at F8, available at 2004 WLNR 18440199.

53 Cybersurgical technology keeps improving. See Oleynikov, Dmitry et al., Miniature Robots Can Assist in Laparoscopic Cholecystectomy, 19 J. SURG. ENDO. 473, 474-475 (2005)Google ScholarPubMed (describing trials in which small robotic cameras placed in pigs’ abdomens provided quality images of the anatomy from different angles which improved “surgical visualization” and the potential that “miniature in vivo robots can provide surgeons with additional visual information that can increase procedural safety.”).

54 Cybersurgeons would need less proficiency in the Chinese language (as compared to surgeons who immigrate to China), because: (1) there are fewer intra-operative commands to subordinates and (2) the cybersurgeon would not have to learn Chinese to cope with the activities of daily living in China, such as going to the grocery store. While the Chinese are patient teachers, my personal experience in China taught me that communicating with the Chinese in the grocery store is much more difficult than communicating with citizens of the E.U., Mexico or Brazil.

55 A wildcard in the decision-making process of selecting telemedicine or immigration as a solution to China's cardiac surgical needs is the cost of doing business. Setting up a telemedical business requires little capital. Future of Telemedicine, supra note 8. Moreover, in the present market the cost of hardware, overhead and software to run web-based business is plummeting. See John Heilemann, Retooling the Entrepreneur, BUSINESS 2.0, Nov. 1, 2005, at 42-45, http://money.cnn.com/magazines/business2/business2_archive/2005/11/01/8362816/index.htm.

56 In 2005, the GDP per capita income in China was $6200; compared with $41,800 in the U.S. CIA - The World Fact Book – Rank Order – GDP – per capita, http://www.cia.gov/cia/publications/factbook/rankorder/2004rank.html. (last visited Feb. 26, 2006) [hereinafter CIA].

57 See discussion infra Part II(C)(1).

58 Offshoring, supra note 8, at 244.

59 The GDP per capita income in Canada in 2005 was only $32,800. CIA, supra note 56. Despite having to pay less for healthcare, and reimbursing its cardiac surgeons at a lower rate, Canada seems to receive the same level of quality care at a lot less money. Eisenberg, Mark J. et al., Outcomes and Cost of Coronary Artery Bypass Graft Surgery in The United States and Canada, 165 ARCH. INTERN. MED. 1506, 1506 (2005)CrossRefGoogle ScholarPubMed (Despite paying 82.5% less for a cardiac bypass procedure, the outcomes of cardiac bypass procedures in Canada and the U.S. are the same).

60 Offshoring, supra note 8, at 242-243. While less technically demanding medical services (e.g. radiology) are being outsourced to India because of cheap physician labor costs, it is unlikely that China will be able to import Indian cybersurgeons anytime soon. Although India is willing to sell some specialized medical services to foreigners who are willing to travel to India and pay for medical care. See Ray Marcelo, India Fosters Growing ‘Medical Tourism’ Sector, http://yaleglobal.yale.edu/display.article?id=2016; Delhi Is Looking to Boost the Private Healthcare Sector by Promoting the Country as a Destination for Cheap, World-Class Medical Treatment, FIN. TIMES UK, July 2, 2003, at 10Google Scholar. India, like China, does not have enough cardiac surgeons for its own population, India - International Children's Heart Fund, http://www.ichfund.org/Projects/Project_India.htm (last visited Feb. 10, 2005).

61 Offshoring, supra note 8, at 264.

62 See id. at 214-215.

63 China Deal to Boost Economy, BBC NEWS, Nov. 15, 1999, available at http://news.bbc.co.uk/1/hi/business/the_economy/520874.stm.

64 Blumenthal, David & Hsiao, William, Privatization and Its Discontents-The Evolving Chinese Health Care System, 353 New Eng. J. Med. 1165, 1167-1168 (2005)CrossRefGoogle ScholarPubMed; see also China Cuts Income Tax for Low Wage Earners, THE STAR, Oct. 23, 2005, available at http://biz.thestar.com.my/news/story.asp?file=/2005/10/23/business/20051023100413&sec=business (income tax paid by poor to be cut to alleviate social unrest).

65 Lev, Michael A., In China, No Money Means No Treatment; Police Ignored an Itinerant Carpenter Injured by a Car, and an Ambulance Driver Refused to Pick Him up, CHI. TRIB., Nov. 12, 2004, at C4Google Scholar; Francis Markus, China's Ailing Health Care, BBC NEWS, Dec. 7, 2004, available at http://news.bbc.co.uk/2/hi/asia-pacific/4062523.stm) (approximately one-third of China's population does not visit the doctor's office because they cannot afford to pay for the visit).

66 China's Health Care: Where are the Patients?, ECONOMIST, August 21, 2004, at 59; see China's Ailing Health Care, supra note 65; see also Lev, supra note 65.

67 Robert Go & Ruth Given, Striking the Right Balance in Emerging Countries’ Health Care Systems, DELOITTE, May 19, 2005, http://www.deloitte.com/dtt/whitepaper/0,1017,sid%253D34239%2526cid%253D71669,00.html.

68 See generally Christian Gericke, et al., Health Care Financing and Access to Health Services in Rural China, Presented at the Int’l Health Econ. Ass’n 5th World Cong. 2005 (July 11, 2005) (presentation available at http://www.mig.tuberlin.de/files/2005.lectures/2005.07.11.cg_Barcelona.pdf).

69 Id. at 4.

70 Using telemedicine to correct for a misdistribution in health care resources is a concept that has applicability in the U.S. See INST. OF MED., QUALITY THROUGH COLLABORATION: THE FUTURE OF RURAL HEALTH CARE 13-15 (Nat’l Academic Press 2005), available at http://newton.nap.edu/books/0309094399/html/13.html.

71 McLean, supra note 8. A basic telemedical operation can be set up for less than $200,000. However, one robotic surgical instrument costs $1 million (not including disposables) so the capital investment is a bit more onerous in the establishment of a cybersurgical operation. See McLean, Enterprise Liability, supra note 51, at 169.

72 See generally Richards, Edward P. & McLean, Thomas R., Administrative Compensation for Medical Malpractice Injuries: Reconciling the Brave New World of Patient Safety and the Torts System, 49 ST. LOUIS U. L.J. 73 (2004)Google Scholar (describing possible alternatives to the tort system, in particular the advantages and disadvantages of a no-fault system).

73 See Tony Allison, Risks and Rewards in China's Insurance Market, ASIAN TIMES, Feb. 16, 2001, available at http://www.atimes.com/reports/CB16Ai01.html.

74 Medical Insurance Given Fat Market, BUS. WEEKLY, April 16, 2001, available at http://www.investchina.com.cn/english/MATERIAL/11119.htm

75 See Song-Song Liao, Steps Toward Stability?, MUNICH RE, http://www.munichre.com (follow “Topics and Solutions” hyperlink; then follow “Life and Health” hyperlink; then follow “Steps Toward Stability?” hyperlink) (last visited Feb. 26, 2006).

76 Estimates for the number of Chinese nationals with health insurance vary from 15% (Glifford & Wood, supra note 12, at 23) to 29% (Blumenthal & Hsiao, supra note 64, at 1167).

77 See China to Further Expand Health Insurance, XINHAU NEWS AGENCY, Feb. 7, 2002, available at www.china.org.cn/english/SO-e/26705.htm.

78 See Hu, The-wei, Financing and Organization of China's Health Care, 82 BULL. WORLD HEALTH ORG. 480 (2004)Google ScholarPubMed, available at http://www.scielosp.org/scielo.php?pid=S0042-96862004000700002&script=sci_arttext&tlng=en.

79 See Wang, Hong, Yip, Winnie, Zhang, Licheng, et al., Community-Based Health Insurance in Poor Rural China: the Distribution of Net Benefits, 20 HEALTH POL’Y & PLAN. 366, 367 (2005)Google ScholarPubMed, available at http://heapol.oxfordjournals.org/cgi/reprint/20/6/366.

80 See generally Blumenthal & Hsiao, supra note 64, at 1167; China's Rural Health Worries, BBC NEWS, July 4, 2002, available at http://news.bbc.co.uk/2/hi/asia-pacific/2089581.stm; and Baker, Tom, Medical Malpractice and the Insurance Underwriting Cycle, 54 DEPAUL L. REV. 395 (2005)Google Scholar (although this article use medical malpractice to illustrate the insurance cycle, the same principles apply to health insurance).

81 See Baker, Tom, Medical Malpractice and the Insurance Underwriting Cycle, 54 DEPAUL L. REV. 395 (2005)Google Scholar (although this article use medical malpractice to illustrate the insurance cycle, the same principles apply to health insurance).

82 Hu, supra note 78.

83 Markus, supra note 65.

84 During the period of communist rule, it was said that the Chinese “government gave people low incomes but it looked after them from cradle to grave.” Id. Under the current system, however, neither the rich nor poor are satisfied with health care in China. Id.

85 See generally Matt Young, DNA Chips Bring Personalized Medicine to China, ASIAN TIMES, Oct 6, 2005Google Scholar, available at http://www.atimes.com/atimes/China_Business/GJ06Cb01.html.

86 See T.C.A. Srinivasa-Raghavan, Rediff.com, The Flip Side of Health Insurance (Oct. 7, 2005), http://in.rediff.com/money/2005/oct/07guest.htm.

87 See generally McLean, Thomas R. & Richards, Edward P., Managed Care Liability for Breach of Fiduciary Duty After Pegram v. Herdrich: The End of ERISA Preemption for State Law Liability for Medical Care Decision-Making, 53 FLA. L. REV. 1 (2001)Google Scholar (discussing the ability to sue an HMO under state laws after the decision in Pegram); Richards, Edward P. & McLean, Thomas R., Physicians in Managed Care: A Multidimensional Analysis of New Trends in Liability and Business Risk, 18 J. LEGAL MED. 443 (1997)CrossRefGoogle ScholarPubMed (discussing emerging areas of liability for physicians, in particular the risk of committing commercial crime infractions).

88 See Srinivasa-Raghavan, supra note 86. In fact, China has found “evidence of health insurance increasing the risk of ‘high’ out-of-pocket expenses.” (quoting Wagstaff, Adam & Lindelow, Magnus, Can Insurance Increase Financial Risk? The Curious Case of Health Insurance in China, WORLD BANK POLICY RESEARCH WORKING PAPER 3741, October 2005,Google Scholar at 1). This phenomenon is referred to as moral hazard and will be addressed in more detail shortly. See infra Part II(B)(1)(c).

89 Testimony of the Biotechnology Industry Org. Before the Judiciary Comm. of the U.S. Senate, July 14, 2004, available at http://www.bio.org/healthcare/importation/20040714importtest.asp (“capital markets are acutely sensitive to factors that threaten to limit current or future profitability for any company or industry sector”).

90 Presently, health insurance coverage in China is written as indemnity contracts with low coverage limits, as managed care-type products are virtually unknown. See discussion supra notes 74- 79.

91 See Liao, supra note 75.

92 In fact, once certain medical events occur in an individual, it is likely that more events will follow. For example, after a myocardial infarction occurs, individuals are likely to undergo either PTCA, cardiac surgery or both. Much of the fighting that is taking place in clinical medicine today concerns how much treatment is to be given and who pays after an “index event.”

93 This behavioral phenomenon is referred to as moral hazard and will be discussed in more detail. See discussion infra Part II(B)(1)(C). It is because of moral hazard that many life insurance policies have clauses that prohibit the insured from engaging in hazardous activities (e.g. scuba diving, sky diving and mountain climbing) after the creation of the insurance contract. See infra Part II(B)(2).

94 Liao, supra note 75.

95 To deal with market volatility, insurers redistribute their risk in the capital market. This need to redistribute risk means that healthy insurance markets require an association with healthy capital markets. See infra Part II(B)(2).

96 See Republic Tobacco Co. v. N. Atlantic Trading Co., Inc., 381 F. 3d 717, 738-9 (7th Cir. 2004) (describing the inapplicability of similar market tests to the business of wholesalers), and Evanston Nw. Healthcare Corp., NO. 9315, 2005 WL 2845790, at *30 (F.T.C. 2005) (explaining that the Elzinga-Hogarty test for determining geographic market is not appropriate because the purchaser was an insurer and not the ultimate consumer); but see INSTITUTE OF MEDICINE, TO ERR IS HUMAN: BUILDING A BETTER HEALTH CARE SYSTEM (Janet Corrigan et al. eds., Nat’l Acad. Press 2000) (describing how to improve health care quality viewing health care as a business model)[hereinafter TO ERR IS HUMAN].

97 See Richards & McLean, supra note 72, at 456. (stating that the manner in which prescription of medical care substantially impairs the profitability of insurers).

98 See Brost, Hans G., The Hammer, the Sickle, and the Scalpel: a Cardiac Surgeon's View of Eastern Europe, 69 ANNALS THORACIC SURGERY 1655 (2000)CrossRefGoogle Scholar (demonstrating that on a per capita basis, American cardiac surgeons perform twice as many coronary revascularizations than surgeons in other industrial countries); John Carey & Amy Barrett, Is Heart Surgery Worth It?, BUS. WK., July 18, 2005, at 32 (questioning the $100 billion dollars per year that is spent on revascularizing the coronary arteries of patients in the U.S. when the “U.S. spends 2 1/2 times as much as any other country per person on health care, but that doesn't translate into better outcomes”).

99 See generally McLean, Thomas R., Using the Market to Regulate Healthcare Price: Why Heart Hospitals Will Have a Competitive Advantage in the World of Post-DRG Pricing, 2 AM. HEART HOSPITAL J. 165 (2004)CrossRefGoogle Scholar; McLean, Thomas R. & Richards, Edward P., Health Care's “Thirty Year War”: Origins and Dissolution of Managed Care, 60 N.Y.U. L. REV. 283 (2004)Google Scholar; McLean, Thomas R., Medical Rationing: The Implicit Results of Leadership by Example, 36 J. HEALTH LAW 325 (2003)Google Scholar; Thomas R. McLean, Application of Administrative Law to Health Care Reform: the Real Politik of Crossing the Quality Chasm, 16 J.L. & HEALTH 65 (2002).

100 It is assumed that China's health insurance market is a static structure composed of players acting in their own self interest and who merely responded to the incentives placed in the market. Part III(B) will look at China health insurance market as its influenced by GATS. This discussion will provide a glimpse of insurance market dynamics and help to explain exactly why China and other nations will increasingly open their markets to western insurers.

101 Insurance Market to Keep WTO Promise, CHINA DAILY, May 24, 2005, available at http://www.china.org.cn/english/BAT/129805.htm (stating that foreign insurers are interested in China's insurance market because the Chinese market has averaged a 30% increase over the last 20 years).

102 See Lin Jingwei, The Crystal Ball Foresees A Magnificent Future for Unisys, Unisys Financial Services, http://www.unisys.com/financial/solutions/the__crystal__ball__foresees__a__magnificent__future__for__unisys.htm (last visited Feb. 26, 2006).

103 Given the difficulty with controlling content on the internet, it is likely that once the Chinese set up telemedical facilities in rural China, it will be hard for Chinese to keep rural patients from selecting foreign providers; especially if foreign providers are willing to accept only the reimbursement covered by insurance.

104 Just as America is unlikely to be able to push for free trade, which has benefited its insurance and capital markets, while simultaneously protecting its health care market for much longer, China is unlikely to be able to continue to simultaneously protect both its manufacturing and healthcare sectors from foreign competition either. See generally Yeo, Matthew S., Distance Health Services Under the General Trade in Services Agreement, 35 J. HEALTH L. 83 (2002)Google Scholar (concerning the international potential of telemedicine from the perspective of the United States).

105 See Siegelman, Peter, Adverse Selection in Insurance Markets: An Exaggerated Threat, 113 YALE L.J. 1223, 1223 (2004)CrossRefGoogle Scholar.

106 See Roberta B. Meyer, Justification for Permitting Life Insurers to Continue to Underwrite on the Basis of Genetic Information and Genetic Test Results, 27 SUFFOLK U. L. REV. 1271, 1289-91 (1993) (stating that adverse selection is more common when insurance premiums are determined by a community rating system rather than by an experience rating system).

107 At that time, most insurance policies were underwritten using a system of “community ratings” rather than a system based on experience ratings. See discussion infra Part IV(B).

108 Rothschild, Michael & Stiglitz, Joseph, Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information, 90 Q.J. ECON. 629 (1976)CrossRefGoogle Scholar, available at http://links.jstor.org/sici?sici=0033-5533(197611)90%3A4%3C629%3AEICIMA%3E2.0.CO%3B2-N.

109 Siegelman, supra note 105, at 1237.

110 The case for the operation of adverse selection is much stronger for automobile insurance. See id. at 1241.

111 Id. at 1224.

112 This may reflect a combination of factors that include: mandated insurance coverage in some areas (e.g. automobile) and the widespread availability of health insurance from employers. Such factors, either alone or in combination, may attenuate the impact of adverse selection to a point where it cannot trigger a death spiral.

113 See generally Siegelman, supra note 105.

114 Id. at 1245.

115 Id. at 1248.

116 See Thomas R. McLean, Antitrust Law and a Tale of Two Health Care Industries, AM. HEART HOSP. J. 24, 29 (2005) (citing MIKE SMITH & DAVID COLBY, ANTHEM/WELLPOINT INVESTOR PRESENTATION, (Nov. 2003), http://www.wellpoint.com/pdf/112003WLPATHInvesPresRev-114XPreVersFinal.pdf.).

117 Daniel Altman, A Program Intended to Offer Health Insurance to the Poor, N.Y. TIMES, Dec. 4, 2002, at W1.

118 Liao, supra note 75.

119 Id.

120 The need to establish risk pools with predominantly healthy patients is not a problem unique to China. In fact the U.S. government is currently facing the same problem as it attempts to establish insurance programs under Medicare part D.

121 Liao, supra note 75.

122 Siegelman, supra note 105, at 1253.

123 Id. at 1253 n. 91.

124 Id. at 1253. Not surprisingly, those without health insurance often end up being treated by public health services. Such a practice improves insurer profitability at the expense of those paying taxes to support a public health system. Further discussion of shifting insurance risk to the public health system of a country is beyond the scope of this article.

125 See China to Tighten Insurance Regulations, PEOPLE's DAILY, Feb. 9, 2002, available at http://english.people.com.cn/200202/09/eng20020209_90184.shtml.

126 The profits of an insurer are influenced by other factors including the insurance cycle. See RICHARD KIPP, JOHN P. COOKSON, & LISA L MATTIE, HEALTH INSURANCE UNDERWRITING CYCLE EFFECTS ON HEALTH PLAN PREMIUMS AND PROFITABILITY, Milliman USA, 2003, available at http://www.hospitalconnect.com/aha/press_room-info/content/MillimanReport030410.pdf (discussing the impact of the insurance cycle on premiums).

127 At present, most insurers in China are Chinese firms, as the CIRC has invited only a few foreign insurers to set up or expand their businesses in China. U.S. – CHINA BUSINESS COUNCIL, WTO: HIGHLIGHTS OF THE PRC IMPLEMENTATION EFFORTS TO DATE, (Jan. 31, 2002), http://www.uschina.org/public/documents/2005/04/wto-implementation-2.pdf.

128 Karen Eggleston & Chee-Ruey Hsieh, Healthcare Payment Incentives: A Comparative Analysis of Reforms in Taiwan, South Korea and China, (Dep’t. of Econ., Tufts U. Working Paper No. 0402, 2004) (averring that healthcare systems with better provider incentives develop at a faster rate).

129 Liao, supra note 75.

130 Malcolm Gladwell, The Moral-Hazard Myth, NEW YORKER, Aug. 29, 2005, available at http://www.newyorker.com/fact/content/articles/050829fa_fact.

131 Andy Mukherjee, China's Spending Fury Points to `Moral Hazard', Bloomberg.com, Apr. 13, 2004, http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_mukherjee&sid=a5.c9TS3H N40.

132 See LAWRENCE S. SILVER & BRYAN HAYES, ASYMMETRY OF COMMITMENT AND THE SUCKER EFFECT: SALES PERSON ETHICS IN COMMON AGENCY 47-48 (2003), http://acme.org/2003Proceedings/PDFfiles/2003-Paper25.pdf; Sam Vanknin, Moral-Hazard and the Survival Value of Risk, http://samvak.tripod.com/pp150.html (last modified June 2005).

133 See generally FRANK PATNOY, INFECTIOUS GREED (Norton 2003), and JOSEPH E. STIGLITZ, THE ROARING NINETIES (Norton 2004) (discussing how asymmetric knowledge of markets and market regulations mean that some individuals will profit handsomely).

134 Hsiao, William C., Abnormal Economics in the Health Sector, 32 HEALTH POLICY 125, 131 (1995)CrossRefGoogle Scholar, available at http://www.hsph.harvard.edu/phcf/Papers/Abnormal%20Economics-Hsiao.pdf.

135 See generally Russo, Gerard, Optimal Commodity Taxation with Moral Hazard and Unobservable Outcomes, 2003 INT. J. HEALTH CARE FIN. & ECON. 53. (providing an economic analysis of the utility of cigarette taxation).Google Scholar

136 Conceptually, if smokers had to pay the cost of acute smoking-related respiratory illness in life, then we as a society might see many fewer chronic smoking related illnesses like vascular disease.

137 Patricia M. Danzon, Health Care Industry, in THE CONCISE ENCYCLOPEDIA OF ECONOMICS (David R. Henderson ed., 1999-2002), available at http://www.econlib.org/library/Enc/HealthCareIndustry.html.

138 See Srinivasa-Raghavan, supra note 86.

139 See Hu, supra note 80; Wang, supra note 81.

140 Wang, supra note 81, at 366. (in fact, China has found evidence of health insurance increasing the risk of ‘high’ out-of-pocket expenses).

141 William C. L. Hsiao, The Chinese Health Care System: Lessons for Other Nations, 41 SOC. SCI. MED. 1047, at 1053 (1995).

142 Tim Pringle, Industrial Unrest in China—A Labour Movement in the Making?, CHINA LABOUR BULL., Jan. 31, 2002, available at http://www.hartford-hwp.com/archives/55/294.html.

143 See generally ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT, ECONOMIC SURVEY OF CHINA – 2005 (2005), http://www.oecd.org/dataoecd/10/25/35294862.pdf.

144 Reserves are monies that have been set aside by insurers to cover potential future losses; thereby trying to avoid or mitigate insurer insolvency. See Washington State Office of the Insurance Commissioner, A Consumer's Insurance Glossary, http://www.insurance.wa.gov/consumers/glossary.asp (last visited Feb. 26, 2006).

145 See generally Peter Carayannopoulos, Paul Kovacs & Darrell Leadbetter, Insurance Securitization: Catastrophic Event Exposure and the Role of Insurance Linked Securities in Addressing Risk (ICLR Research Paper Series No. 27, Jan. 2003), available at http://www.iclr.org/pdf/securitization.pdf

146 See generally RAYMOND W. BAKER, CAPITALISM's ACHILLES HEEL (Wiley 2005).

147 ROGER STEEL, CHINA's INSURANCE INDUSTRY AND ITS CAPITAL MARKETS, TROWBRIDGE DELOITTE (Feb. 2003), http://deloitte.net/dtt/cda/doc/content/Steel%2003%20ChinaCapitalMkts.pdf (discussing the role of capital markets and insurance in China). This relationship also explains the recent “medical malpractice crisis” which had more do with the bursting of the dot-com and telecommunication financial bubbles than with other perceived causes. See McLean, Thomas R., Health v. Stealth: Revisiting Tort Reform, 14(4) LEG. MED. PERSPECTIVES 51 (2005)Google Scholar, and McLean, Thomas R., Health v. Stealth: The Complexity of Tort Reform, 12(2) LEG. MED. PERSPECTIVES 19 (2003)Google Scholar.

148 See STEEL, supra note 147.

149 Gramm-Leach-Bliley Act, 15 U.S.C. §§ 6801-6809, §§ 6821-6827 (1999).

150 Citigroup is perhaps the best example of such a hybrid business organization. This organization represents a consolation of Citibank, Traveler Insurance, and Salomon Brothers. See About Citigroup, http://www.citigroup.com/citigroup/about/index.html (last visited Feb. 26, 2006).

151 Michael Barbaro, Bankers Oppose Wal-Mart as Rival, NY Times, Oct 15, 2005, at C1 (discussing the most extreme example of blurring of the banking borders: Wal-Mart is poised to enter the banking market).

152 In essence, this is precisely what Enron did; it transformed itself from a provider of oil and natural gas to an investment bank that traded futures contracts in oil and gas. BETHANY MCLEAN & PETER ELKIND, THE SMARTEST GUYS IN THE ROOM: THE AMAZING RISE AND SCANDALOUS FALL OF ENRON (2003). Such transformation is greatly facilitated by the standardization of contracts for services within an industry. Id.

153 Cadwalader, Wickersham & LLP, Taft, Capital Markets, Derivatives and (Re)insurance, 7(5) GLOBAL REINSURANCE (Sep. 1998)Google Scholar, available at http://library.findlaw.com/1998/Sep/1/128965.html. Wall Street needs to expand globally because the demand for instruments to manage the risks associated with the volatile global financial environment has driven an explosive demand for growth of the capital markets during the last 30 years. Id.

154 Elaine Kurtenbach, China, U.S. Face Off Over Economic Reforms, N.C. TIMES.COM, Oct. 16, 2005, http://www.nctimes.com/articles/2005/10/17/business/news/101605201215.txt (last visited Feb. 26, 2006). (“Washington also wants China to remove the US $10 billion (€8 billion) minimum requirement in assets that restricts the ability of foreign institutional investors to buy domestic securities, and to end foreign ownership caps on financial institutions and allow 100 percent foreign ownership of subsidiaries”). Id.

155 See generally Julie Sommers, Investing in China's Capital Markets: Where Will WTOSparked Reforms Lead?, ASIAN SOCIETY (May 2002), available at http://www.ciaonet.org/conf/asoc_spch02/soj01.html.

156 See generally Thomas L. Friedman, THE LEXUS AND THE OLIVE TREE: UNDERSTANDING GLOBALIZATION (First Anchor Books 2000).

157 Long Wait Over as China Joins WTO, CNN NEWS, Dec. 10, 2001, available at http://edition.cnn.com/2001/BUSINESS/asia/12/10/china.wto/.

158 A detailed discussion of commitments under GATS is beyond the scope of this article, but see Future of Telemedicine, supra note 8; Mutchnick, Stern, & Moyer, supra note 10.

159 See Future of Telemedicine, supra note 8.

160 See generally THE US-CHINA BUSINESS COUNCIL, CHINA's WTO IMPLEMENTATION: A MID-YEAR ASSESSMENT (2003), http://www.uschina.org/public/documents/2003/06/17-wtoanalysispaper.pdf.

161 Insurance Market to Keep WTO Promise, CHINA DAILY, May 24, 2005, available at http://www.chinadaily.com.cn/english/doc/2005-05/24/content_445143.htm.

162 Glifford & Wood, supra note 12, at 21.

163 Id. at 20-23. In China, exclusive foreign ownership of a hospital is still verboten. Id. at 23.

164 Steel, supra note 147.

165 See generally Investment-Linked Insurance Emerges in Market, PEOPLE's DAILY ONLINE, May 16, 2000, http://english.people.com.cn/english/200005/16/eng20000516_40933.html.

166 See General Electric, http://www.gecapital.com (last visited Feb. 26, 2006).

167 See GE Healthcare – Brochure – About GE Healthcare, www.gehealthcare.com/usen/about/about.html (last visited Feb. 26, 2006).

168 Proprietary knowledge would be required to understand how corporations actually steer business to subsidiaries. But to illustrate how steering business might be accomplished consider a simplified situation where GE Capital has a strong working relationship with a hospital. When the hospital needs a new CT scanner, GE Capital could arrange for the hospital to receive financing at substantially below market rates—if the hospital buys its CT scanner from GE Medical.

169 Not all medical equipment is medically necessary. Although outright fraud is much more common in low-dollar equipment purchases than in high-dollar equipment purchases like CT scanners, fraud involving medical equipment does occur from time to time. See OFFICE OF THE UNITED STATES ATTORNEY WESTERN DISTRICT OF MISSOURI, TODD P. GRAVES, NEWS RELEASE, COLUMBIA ONCOLOGIST WILL PAY $1 MILLION, SURRENDER MEDICAL LICENSE IN FEDERAL CIVIL AGREEMENT (Nov. 7, 2005), http://www.usdoj.gov/usao/mow/news2005/hueser.civil.pdf.

170 See generally Fuchs, Victor R., Health Care Expenditure Reexamined, 143 ANN. INTERN. MED. 76 (2005)CrossRefGoogle ScholarPubMed.

171 Largest Healthcare Financing Companies, MOD. HEALTHCARE ONLINE, Oct 3, 2005, http://www.modernhealthcare.com/chart.cms?id=497&type=surveys (JP Morgan is the largest healthcare financer with 18.8% of the market).

172 BLOM Bank: Useful Numbers, http://www.blom.com.lb/usefulnumbers.asp (last visited Mar. 2, 2006). I am not a VISA platinum card member; but I suspect that the telemedical services being offered at present are limited to teleconsultation between a traveler and a physician in his or her home country.

173 See Srinivasa-Raghavan, supra note 86. A more detailed discussion of how insurers influence medical decision-making is beyond the scope of this article.

174 Erin Strout, Harvard Endowment Nears $26 billion, CHRONICLE OF HIGHER EDUC., Oct. 14, 2005, available at http://chronicle.com/weekly/v52/i08/08a03002.htm (subscription is necessary to read full article).

175 China-U.S. Symposium, http://www.law.harvard.edu/programs/pifs/chinaus.html (last visited Feb. 26, 2006).

176 See TO ERR IS HUMAN, supra note 96, at 34-35.

177 Conceptually the damages from a medical misadventure could include: the cost of remedial care, pain & suffering, lost-time from work, loss of consortium and punitive damages. Arbitration is not a forum for punitive damages and conceptually many of the other damages may be explicitly excluded from the scope of arbitration by language in an arbitration clause. A detailed discussion of the nature of damages awards that are available through arbitration is beyond the scope of this article.

178 All corporate and governmental entities mentioned in this hypothetical are purely imaginary. Any similarities between the description in this hypothetical and existing corporate or governmental entities are purely coincidental.

179 I have previously described how this might be achieved. See generally Automatic Cybersurgery, supra note 9, at 504.

180 China has a single labor union, the All-China Federation of Trade Union with 137 million members, views its “basic role [to] protect workers and their rights.” A New China for Organized Labor, BUS. WK. ONLINE, Aug. 22, 2005, http://www.businessweek.com/magazine/content/05_34/b3948435.htm.

181 A detailed discussion of the use of Six-Sigma in medical decision making is beyond the scope of this article.

182 Allen v Pacheco, 2003 Colo. LEXIS 484.

183 Sandra Blakeslee, Surgeons Are Warned about Heart Valves, N.Y. TIMES, Aug. 28, 2002, at A15 (explaining that the F.D.A. issued a warning that some of Cyolife's heart valves were contaminated during manufacturing).

184 Today in the U.S., liability for medical bills is the number one reason individuals seek bankruptcy protection. Medical Bills Leading Cause of Bankruptcy Harvard Study Finds, CONSUMERAFFAIRS.COM, Feb. 3, 2005, http://www.consumeraffairs.com/news04/2005/bankruptcy_study.html.

185 Herein, I assume that China's procedure and remedies for the handling of private wrongs are identical to the tort system in the U.S. While I am anything but a Chinese attorney, my assumption is not an unreasonable one. See INTRODUCTION TO CHINESE LAW 169 (Wang Chenguang & Zhang Xianchu, eds., Sweet & Maxwell Asia 1997)

186 Automatic Cybersurgery, supra note 51.

187 See Offshoring, supra note 8.

188 THE COLUMBIA ENCYCLOPEDIA 1400 (Paul Lagassé, ed., Colum. U. Press 2000) (1893).

189 Id.

190 Id.

191 RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE U.S. §101 (1987) With the heightened interest in human rights that developed in the late 20th century, international law now pertains to individuals as well as nations.

192 ANTHONY A. D'AMATO, THE CONCEPT OF CUSTOM IN INTERNATIONAL LAW 3 (Cornell U. Press 1971). There are two caveats to assertions made in the text; the International Court of Justice has potential to develop common law but its authority is underutilized, and U.N. resolutions are not binding on individuals.

193 Anthony D’Amato, Presentation at the Max Plank Institute for Comparative Public Law and International Law: International Law as an Autopoietic System (Nov. 23, 2003).

194 See RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE U.S., Introduction Note (1987).

195 The Paquete Habana, 175 U.S. 677 (1900).

196 Daniel Bodansky, Introduction to Customary International Law (2004) (unpublished manuscript, on file with the University of Georgia School of Law and available at http://www.law.uga.edu/∼bodansky/courses/International_Law/class12.html).

197 Paul P. Polanski & Robert B. Johnson, Presentation at the 35th Hawaii Conference on Systems Science: International Custom as a Source of Law in Global Electronic Commerce (2002) (discussing Model Law on Electronic Commerce, G.A. Res. 51/162, U.N. Doc. A/RES/51/162 (Jan. 30, 1997)); and two E.U. Directives’: The Electronic Commerce (Council Directive 1999/93/EC, 1999 O.J. (L 13)) and Digital Signature (Council Directive 2000/31/ EC, 2000 O.J. (L 178)).

198 Id.

199 D’AMATO, supra note 192, at 7.

200 Bodansky, supra note 196.

201 As the concept of custom will have little impact on the analysis of the hypothetical, I will not attempt to further elucidate this term of art.

202 D’AMATO, supra note 192, at 4.

203 Id.

204 See Roberts, Anthea Elizabeth, Traditional and Modern Approaches to Customary International Law: A Reconciliation, 95 AM. J. INT’L. L. 757, 757 (2001)CrossRefGoogle Scholar, available at http://www.asil.org/ajil/roberts.pdf.

205 Polanski & Johnson, supra note 197.

206 This statement will soon be obsolete because over time the guidelines throughout the world will become standardized. See McLean, Thomas R., The 80-hour work week: Why Safer Patient Care Will Mean More Health Care is Provided by Physician Extenders, 26 J. LEGAL MED. 339, 365–366 (2005)CrossRefGoogle ScholarPubMed. The patient safety revolution will increasingly promulgate medical practice guidelines that will standardize the practice of medicine. See McLean, Thomas R., Implication of Patient Safety Research & Risk Managed Care, 26 S. ILL. U. L.J. 227 (2002)Google Scholar.

207 Peter J. Turner & Jan Paulsson, Presentation at the Experts Group Meeting on Dispute Resolution and Corporate Governance: Grounds for Refusal of Recognition and Enforcement under the New York Convention: A Comparative Approach (June 25, 2003), available at http://72.14.207.104/search?q=cache:pJIDR8fB_VcJ:www.oecd.org/dataoecd/2/62/3860479.pdf+Paulsson+%22Grounds+for+Refusal+of+Recognition+and+Enforcement%22+&hl=en.

208 Doung, Wendy N., Partnerships with Monarchs –Two Case Studies: Case One: Partnerships with Monarchs in the Search for Oil: Unveiling and Re-examining the Patterns of “Third World” Economic Development in the Petroleum Sector, 25 U. PA. J. INT’L ECON. L. 1171, 1266 n. 228 (2004)Google Scholar.

209 Comity of nations concerns acts or practices of one nation towards another that are based on good will and mutuality rather than strict application of the law. See Gatti & Associates, FAQ: International Law, 2000, http://library.findlaw.com/2000/Jul/1//128979.html (last visited Feb. 17, 2006).

210 Doung, supra note 208, at 1266 n. 228 (citing Hartford Fire Ins. v. Cal., 509 U.S. 764 (1993)) (expanding U.S. antitrust law to apply to the actions of remote foreign individuals).

211 United Nations Convention on the Law of Treaties art. 2, May 23, 1969, available at http://www.jus.uio.no/lm/un.law.of.treaties.convention.1969/ (codification of customary international law).

212 U.S. CONST.art. II, § 2, cl. 2.

213 U.S. CONST. art. VI cl. 2; Missouri. v. Holland, 252 U.S. 416, 432 (1920).

214 U.S. v. Curtis-Wright Export Corp., 299 US 304, 317 (1936).

215 See RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE U.S § 314 (1987).

216 Bremen v. Zapata Off-Shore, 407 U.S. 1, 9 (1972); see also Carnival Cruise Lines v. Shute, 499 U.S. 585, 587-88, 593-94 (1991).

217 SIR WALTER RALEIGH, A Discourse of the Invention of Ships, Anchors, Compass, & c., in THE WORKS OF SIR WALTER RALEIGH, KT. VOL. 8 317, 325 (Burt Franklin 1965) (1829

218 COLUMBIA ENCYCLOPEDIA, supra note 188, at 1400.

219 Whether the U.S. should proceed into the twenty-first century under the cover of a multilateral agreements or multiple unilateral agreements was fodder for debate during the last cycle of presidential debates. See Claude Barfield, What Happen to “Compete, Not Retreat”?, AMERICAN ENTERPRISE INSTITUTE, Sept. 23, 2004, http://www.aei.org/publications/pubID.21269,filter.all/pub_detail.asp.

220 See Henry H. Perritt, Jr., Jurisdiction and the Internet: Basic Anglo/American Perspectives Projects Coming in the 2000’s, INTERNET LAW AND POLICY FORUM, July 26-7, 1999, www.ilpf.org/events/jurisdiction2/presentations/perritt_pr/perrittp.htm. (A detailed discussion of individual unilateral treaties and private international law, however, is beyond the discussion of this article).

221 Herein arbitration is defined as “a device whereby the settlement of a question, which is of interest for two or more persons, is entrusted to one or more other persons -- the arbitrator or arbitrators -- who derive their powers from a private agreement, not from the authorities of a State, and who are to proceed and decide the case on the basis of such an agreement.” RENE DAVID, ARBITRATION IN INTERNATIONAL TRADE 5 (1985).

222 United Nations Committee on International Law Trade (UNCITRAL) (1985); Riyadh Convention (1983); Panama Convention (1975); Washington (ICSID) Convention (1965); and the Geneva Convention (1927). See John P. Bowman, The Panama Convention and its Implementation Under the Federal Arbitration Act, 11 Am. Rev. Int'l Arb. 1 (2002), for a more detailed discussion of these treaties; Audley Sheppard & Clifford Chance, Public Policy and the Enforcement of Arbitral Awards: Should there be a Global Standard?, Oil, Gas & Energy Law Intelligence, March 2003, available at http://www.gasandoil.com/ogel/samples/freearticles/article_67.htm

223 See Future of Telemedicine, supra note 8.

224 See, e.g., Central American Free Trade Agreement (2004), Trade Related Intellectual Property and Services (2001) and North American Free Trade Agreement (NAFTA) (1994).

225 America Arbitration Ass’n., Chronology of Important Events in the History of the AAA and ADR (2005), http://www.adr.org/sp.asp?id=22296 (last visited Feb. 26, 2006).

226 Donald J. Kennedy, Maritime Arbitration 1899-1999, Carter, Ledyard & Milburn, available at http://www.clm.com/pubs/pub-880938_1.html.

227 N.Y. Laws 1920 c. 275 (codified as amended at N.Y. Civ. Prac. Law §1-10005 (McKinney 1980)).

228 Federal Arbitration Act, 9 U.S.C. §§1-307. The FAA was modeled after the New York state's arbitration statute to “ensure the validity and enforcement of arbitration agreements in contracts involving maritime transactions or interstate commerce.” Kennedy, supra note 226.

229 America Arbitration Ass’n., supra note 231.

230 See generally Scherk v Alberto-Culver, 417 US 506 (1974).

231 Buckeye Check Cashing, Inc. v. Cardegna, SCt Docket #04-1264 (Feb. 21, 2006); Pacificare Health Sys. v. Book, 538 US 401 (2003); Vimar Seguros y Reasegurous v. M/V Sky Reefer, 515 U.S. 528 (1995); see also Southland Corp. v. Keating, 465 US 1 (1984)(holding that the FAA creates federal substantive law which is applicable in both federal and state courts; and, in matters concerning commerce, this substantive law supersedes conflicting state law).

232 9 U.S.C. § 1 (LexisNexis 2006) (delineating the general arbitration provisions).

233 Id. at § 2.

234 Id. at § 3.

235 Id. at § 9.

236 Id at §§ 10-11; see also CAROLYN B. LAMM & FRANK SPOORENBERG, ENFORCEMENT OF FOREIGN ARBITRAL AWARDS UNDER THE NEW YORK CONVENTION, RECENT DEVELOPMENTS, ICC CONFERENCE ON INTERNATIONAL ARBITRATION (Nov. 5, 2001), http://www.sccinstitute.com/_upload/shared_files/artikelarkiv/lamm_spoorenberg.pdf (observing that absent extraordinary circumstances, arbitration clauses are to be enforced by U.S. courts).

237 9 U.S.C.S. § 4 (LexisNexis 2006). Although the Supremacy Clause means that state law that is in conflict with the FAA will be preempted, courts have generally held that some state procedures in healthcare cases are enforceable even if they would negate the enforceability of the arbitration clause. See Malek v. Blue Cross of California, 2004 Cal.App.LEXIS 1248 (insurance code requirement that clauses to arbitrate in health insurance contracts must contain clearly understandable and conspicuous terms is a precondition to enforcement of a clause to arbitrate).

238 9 U.S.C.S. § 2 (LexisNexis 2006).

239 Id. Until 1970, when the U.S. adopted the New York Convention, the U.S. could not enforce arbitration provisions arising in foreign jurisdictions. Kennedy, supra note 219.

240 Kennedy, supra note 226.

241 New York Convention, supra note 17, arts. I (1) & (2).

242 Id. at art. II (1).

243 Id. at art. III.

244 Id at art. IV.

245 Id. at art. V.

246 Id. at art. V (1).

247 Id. at art. V (2)

248 See Gatti & Associates, supra note 209. Discussion of other measures to terminate international contract disputes, such as the posting of a performance bond, is beyond the scope of this article.

249 See Pacificare Health Sys. v. Book, 538 US 401 (2003); Vimar, 515 U.S. 528 (1995).

250 cf. Under the Uniform Commercial Code, Art. II, the offeror is the master of a contract..

251 Lamm & Spoorenberg, supra note 236.

252 See New York Convention, supra note 17, art. V. Factors that may vitiate a foreign arbitration award include, but is not limited to: incapacity of one party to an arbitration agreement, improper use of procedure, the award granted exceeding the scope of expectation of the parties, the fact that the tribunal's award has not become final, and the possibility that enforcement of the award may be contrary to the forum country's public policy. Id.

253 Charles J. Hunt, Jr., Litigate or Arbitrate?, GRAZIADIO BUS. REPORT, Oct. 22, 2004, available at http://gbr.pepperdine.edu/043/arbitration.html.

254 Future of Telemedicine, supra note 8.

255 See Joseph Kahn, Dispute Leaves U.S. Executive in Chinese Legal Netherworld, N.Y. TIMES, Nov. 1, 2005, at A1. China's “legal system, even when handling nonpolitical business cases, has progressed [little] and still rarely backs investors or ordinary citizens against the state.” Id. Accordingly, in many situations, arbitration is often preferred over courts, for resolution of many “business conflicts that arise from China's thriving market-oriented economy[;] they can rule professionally and impartially.” Id.

256 See generally U.S. Department of State, Enforcement of Judgments, available at http://travel.state.gov/law/info/judicial/judicial_691.html Cf. “On June 30, 2005, the Final Act of the Twentieth Session of the Hague Conference on Private International Law was signed” (displaying the U.S. recent participation in an international agreement with reciprocal recognition and enforcement of judgments). Ronald A. Brand, The New Hague Convention on Choice of Court Agreements, AM. SOC. INT’L LAW, July 26, 2005, available at http://www.asil.org/insights/2005/07/insights050726.html. This Act, which is a new multilateral treaty “is perhaps most easily understood as the litigation counterpart to the New York Arbitration Convention.” Id. Because of recent enactment of the Hague Conference, further discussion is beyond the scope of this article.

257 See U.S. Department of State, supra note 256.

258 Turner, supra note 207, at 8.

259 Herein the discussion on history, structure and implication of GATS on international medical services is very narrow. See Future of Telemedicine, supra note 8, for a more detailed discussion.

260 European Union Ministry of Trade & Industry, What are Barriers to Trade?, http://192.49.226.41/ktm/kaupaneste/e_kaupaneste.html (last visited Feb. 26, 2006) [hereinafter EU Ministry].

261 Litan, Robert E., The “Globalization” Challenge: The U.S. Role in Shaping World Trade and Investment, 18 BROOKINGS REV. 35 (Spring 2000)CrossRefGoogle Scholar.

262 EU Ministry, supra note 260. More generally, a trade barrier is any devices used by a government to impede the establishment of a new industry. See New York v. United States, 331 U.S. 284, 308 (1947).

263 See GATS, supra note 16, at art. II.

264 Id. at art. XVII. Note: Under GATS, national treatment only applies to listed services.

265 The real world application of the MFN and NT clauses becomes complicated because these clauses are variably applied depending on the way a service is provided (i.e., the service's mode type). See Future of Telemedicine, supra note 8. Further discussion of the mode of as service is beyond the scope of this article.

266 JIM GRIESHABER-OTTO & SCOTT SINCLAIR, BAD MEDICINE: TRADE TREATIES, PRIVATIZATION AND HEALTH CARE REFORM IN CANADA 25-26 (2000) [hereinafter BAD MEDICINE].

267 GATS, supra note 16, at Art. XVI.

268 BAD MEDICINE, supra note 266, at 30.

269 Id. at 29.

270 Id. at 30.

271 GATS, supra note 16, at art. VI.

272 Id. at art. VI.4.

273 BAD MEDICINE, supra note 266, at 31.

274 GATS, supra note 16, at pt. IV.

275 Id.

276 Id. at arts. VIII & XXV.

277 In the world of international trade, a “sanction” is “a synonym for a punitive measure; i.e. a measure or response that inflicts more damage than the measure precipitating the response.” ROBERT Z. LAWRENCE, CRIME AND PUNISHMENTS? AN ANALYSIS OF RETALIATION UNDER THE WTO 2 (June 25, 2003), http://ksghome.harvard.edu/RLawrence/Crimes%20and%20Punishments%20Final%20June%2025.pdf.

278 Elizabeth Becker, U.S. Tariffs on Steel are Illegal, World Trade Organization Says, NY Times, Nov. 11, 2003, at A1.

279 Id.

280 BBC News, Europe Praises Bush Steel Repeal (Dec. 5, 2003), http://news.bbc.co.uk/1/hi/business/3293387.stm.

281 This explains why anti-globalists employ methods to physically disrupt WTO negotiations. For example, see Geov Parrish, WTO, No!, SEATTLE WKLY., Sept. 24, 2003, available at http://www.seattleweekly.com/features/0339/news-parrish.php.

282 JOSEPH E. STIGLITZ, GLOBALIZATION AND ITS DISCONTENTS 7 (W.W. Norton & Co., 2002).

283 The United States Mission to the European Union, U.S. Makes Offer in WTO to Open Services Further, Mar. 31, 2003, http://www.useu.be/Categories/WTO/Mar3103USWTOServices.html#fact%20shee. Between 1990 and 2002, the volume commercial services exported by the U.S. increased from $58 billion to $276 billion. Id.

284 Hernando de Soto, Left Out of the Game of Capitalism, GLOBALIST, July 7, 2001, available at http://www.theglobalist.com/DBWeb/StoryId.aspx?StoryId=2076. “The lifeblood of capitalism is not the Internet or fast-food franchises. It is capital. Only capital provides the means to support specialization — and the production and exchange of assets in an expanded market. It is capital that is the source of increasing productivity and therefore the wealth of nations.” Id.

285 USTR – Free Trade in Services: Opening Dynamic New Markets, http://www.ustr.gov/Document_Library/Fact_Sheets/2003/Free_Trade_in_Services_Opening_Dynamic_New_Markets.html (last visited Mar. 1, 2006).

286 Yeo, supra note 104.

287 See Offshoring, supra note 8, at 211-212.

288 World Trade Organization, Risks and Benefits for Developing Country Banking Systems from the Internationalization of Financial Services Examined in New Book by the WTO and the World Bank, Feb. 19, 2001, available at http://www.wto.org/english/news_e/pres01_e/pr208_e.htm.

289 China's Gross Domestic Product (GDP) Growth, http://www.chinability.com/GDP.htm (last visited Mar. 1, 2006). More impressively, membership in the WTO appears to have stabilized China's economic growth. Both before and after 1977, when Deng Xiaoping introduced market reforms, China's economic growth fluctuated wildly until the late 1990s and China's subsequent entrance into the WTO. Id.

290 China Economy Growing at 9.5%, CREADERSNET, Nov. 1, 2005, http://www.creadersnet.com/newsViewer.php?idx=257871.

291 Xu Dashan, China's Economy to Grow 8% Annually from 2006 to 2010, CHINA DAILY, Mar. 21, 2005, http://www.chinadaily.com.cn/english/doc/2005-03/21/content_426718.htm.

292 JP Morgan Chase, As China Rises, So Do Trade Flows, http://www.jpmorganchase.com/cm/ContentServer?cid=1102380206717&pagename=jpmorgan%2Fts%2FTS_Content%2FGeneral&c=TS_Content (last visited Mar. 1, 2006).

293 Id.

294 Mutchnick et al., supra note 10 (“An adequate financial environment must exist for consumption of health services to grow robustly… . Negotiations for liberalization in this market take place within the larger context of the financial services sector, not the health services sector.”).

295 See Richards & McLean, supra note 72.

296 While the actual amount of damages that must be accrued by a patient for an attorney to be willing to take a medical malpractice case vary with geographic location and case complexity; without damages that are substantially above an attorney's expenses, the attorney will not have sufficient economic motivation to take a case.

297 China: Average Wage for Workers in Guangzhou increases by 9.2%, ASIAN LABOUR NEWS, Oct. 23, 2004, available at http://www.asianlabour.org/archives/002975.php (citing the average wage as 22, 446 yuan per year (and assuming an exchange rate of 8:1)).

298 World Watch Institute, Matters of Scale, June 13, 2005, available at http://www.worldwatch.org/press/news/2005/06/13/ (The figure is expressed in per capita based on 1997 data; the corresponding figure for the U.S would be $3,983.).

299 28 U.S.C. § 1350 (2000).

300 See Sosa v. Alvarez-Machain, 542 U.S. 692, 694 (2004).

301 Arlen Specter, The Court of Last Resort, N.Y. TIMES, Aug. 7, 2003, at A23.

302 Conceptually, a Chinese patient could use the arbitration clause to trigger federal jurisdiction under the FAA and New York Convention. Absent extraordinary circumstance, however, the court would simply order the parties back to arbitration. See supra Part III(A).

303 Letter from Edward P. Richards, Louisiana State University, Professor of Torts, to author (Nov. 4, 2005) (on file with author).

304 In contrast to the U.S. view that absent extenuating circumstances the FAA mandates that arbitration clause be enforced, the Chinese follow the China International Economic and Trade Arbitration Commission rules, which allow courts to ignore arbitration clauses under a wider range of conditions. See Chenguang & Xianchu, supra note 185, at §§ 11.10-11.29.

305 The rules for determining jurisdiction in China are similar to those in the U.S. See REDRESS.ORG, REPARATION FOR TORTURE: A SURVEY OF LAW & PRACTICE IN 30 SELECTED COUNTRIES (CHINA COUNTRY REPORT) 22 (2003), http://www.redress.org/studies/China.pdf (“The general jurisdiction of Chinese courts to hear civil cases is based on the defendant's domicile. Such a jurisdiction can also be based on the habitual residence or the place where the defendant conducts his/her business. In tort cases, an additional ground for jurisdiction is the place where the cause of action arose. This includes not only the place where the tort is committed but also the place where the harm occurred. In the absence of any of these grounds, a defendant who is not residing in China is assumed to have consented to a Court's jurisdiction if he/she does not object to the jurisdiction of the court and files a reply to the suit brought by the plaintiff.”). Accordingly, a Chinese court may not have jurisdiction over a remote provider. See Future of Telemedicine, supra note 8.

306 See Service of Process (Taiwan/China), http://www.angelfire.com/ca6/asiavest/service_of_process.html (last visited Mar. 1, 2006).

307 Convention for the Protection of Cultural Property in the Event of Armed Conflict, May 14, 1954, 249 U.N.T.S. 216, http://www.icomos.org/hague/hague.convention.html. 308 U.S. Dep't of State, Hague Convention on the Service Abroad, http://travel.state.gov/law/info/judicial/judicial_686.html (last visited Mar. 1, 2006).

309 Future of Telemedicine, supra note 8. While the a Chinese court may not be able to force an individual physician to stand trial, if the physician's business volume was sufficiently large such that many Chinese patients were injured by the organization, the Chinese government might contemplate filing an arbitration dispute with the WTO against the U.S. A detailed discussion of national arbitration disputes is beyond the scope of this article.

310 Even if the physician had appropriate malpractice coverage a medical malpractice insurer may not have to perform. See id.

311 See RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE U.S., Introduction Note (1987); Polanski and Johnson, supra note 197.

312 See discussion supra Part III.

313 Even if GATS were stretched to cover torts, only nations have standing before a WTO arbitration panel. Future of Telemedicine, supra note 8.

314 And while it is true that an arbitration award can be attacked if the (a) the agreement is not valid where enforcement is sought or not valid where formed; (b) improper notice was given against the party against whom enforcement is sought; (c) the award granted falls outside of the agreed upon terms; or (d) a condition precedent has not been met; none of these conditions are relevant to the hypothetical.

315 Moreover, when a compensation award comes from a professional arbitration panel it is unlikely that the compensation award will be on the order of magnitude of a run-away jury award from an American court (i.e. an award that is often viewed as being offensive to much of the world).

316 See generally RAYMOND W. BAKER, CAPITALISM's ACHILLES HEEL (John Wiley & Sons 2005); NOREENA HERTZ, THE DEBT THREAT (HarperBusiness 2004); NOREENA HERTZ, THE SILENT TAKEOVER (Random House 2001).

317 See Edward Cody, China Warns Gap Between Rich, Poor Is Feeding Unrest, WASH. POST, Sept. 22, 2005, at A16.

318 See, e.g., Alvin Powell, Health Care Reform in China Discussed, HARV. U. GAZETTE, Sept. 15, 2005, available at http://www.news.harvard.edu/gazette/2005/09.15/09-china.html.

319 See, e.g., In re Nexion Health at Humble, Inc., 173 S.W.3d 67 (Tex. 2005), and Allen v. Pacheco, 71 P.3d 375 (Colo. 2003) (both examining the impact of an arbitration clause in a wrongful death action).

320 Richards & McLean, supra note 74, at 88; see also Bismark, Marie, Commentary on Ambros v ACC, 14(5) LEGAL MED. PERSP. 67, 68 (2005)Google Scholar. Note: Because of the definition of arbitration (see supra note 222), administrative proceeding awards are not technically a form of arbitration. However, the procedure used to arrive at an award, whether administratively or through arbitration, has more than a passing similarity.

321 Herein I am avoiding a discussion of the economic consequences on parties who are vested in the current system (like attorneys on both sides of the aisle, insurers, and financial planners who are involved in structured settlements) of jettisoning America's torts system for a system of arbitration.

322 See Richards & McLean, supra note 74, at 79.

323 See Brennan, Troyan A. et al., Incidence of Adverse Events and Negligence in Hospitalized Patients, 324 NEW ENG. J. MED. 370 (1991).CrossRefGoogle ScholarPubMed

324 McLean, Thomas R., Progress v. Pandora's Box: The Arbitration of Medical Malpractice Claims, 12 LEGAL MED. PERSP. 83, 83 (2003)Google Scholar. Interestingly in New Zealand, which has the most advanced system for using administrative arbitration to provide compensation, only a small fraction of potential claimants come forward. See Bismark, supra note 320, at 68.

325 Automatic Cybersurgery, supra note 51, at 172. See generally Zubulake v. UBS Warburg, 217 F.R.D. 309 (S.D.N.Y. 2003) (discussing elaborate trails of electronic information in light of discovery requests for archived media).

326 Automatic Cybersurgery, supra note 51, at 172.

327 See generally Thomas R. McLean, Using The Market To Regulate Health Care Price: Why Heart Hospitals Will Have A Competitive Advantage in The World of Post-Diagnostic Related Group Pricing, 2(3) AM. HEART HOSP. J. 165 (2004).

328 In the hypothetical, the arbitration clause was found in an insurance contract to provide medical services. This is not an insurance contract to cover a provider's alleged negligence. Herein, I am intentionally shifting the nature of the insurance contract without explaining how arbitrated medical misadventure paid under a patient's insurance contract could be subrogated, or the loss transferred through reinsurance, to the responsible provider's medical malpractice insurance contract.

329 See Robert A. Berenson et al., Medical Malpractice Liability Crisis Meets Markets: Stress in Unexpected Places, HEALTH SYS. CHANGE, Sept. 2003, available at http://www.hschange.org/CONTENT/605/

330 Siegleman, supra, note 105, at 1256.

331 Sage, William, Medical Malpractice Insurance and the Emperor's New Clothes, 54 DEPAUL L. REV. 463, 475–83 (2005)Google Scholar.

332 Mark Pauly, How Private Health Insurance Pools Risk, NAT’L BUREAU OF ECON. RES. REP. 5, 5 (2005), available at http://www.nber.org/reporter/summer05/summer05.pdf (“policymakers tend to regard payment of higher premiums by higher risks as unfair”).

333 See Fournier, Gary M. & McInnes, Melayne Morgan, The Case for Experience Rating in Medical Malpractice Insurance: An Empirical Evaluation, 68 J. RISK & INS. 255, 258 (2001)CrossRefGoogle Scholar, available at 2001 WLNR 4809651; Sage, supra note 331, at 470.

334 Sage, supra note 331, at 475-83.

335 Fournier & McInnes, supra note 333, at 258.

336 Joseph P. Newhouse & Paul C. Weiler, Reforming Medical Malpractice and Insurance, REG. (Jan. 2003), available at http://cato.org/pubs/regulation/regv14n4/reg14n4-newhouse.html.

337 Id.

338 This hypothetical is based on an actual practice situation.

339 The return trip to the operating room for bleeding is frequent performed by an experienced resident and not the attending surgeon.

340 See Gladwell, supra note 130, at 44.

341 See Matthew Maier, Finding Riches in a Mine of Credit Data, BUS. 2.0, Oct. 22, 2005, at 72 (discussing how one insurer is using financial data as a proxy for raw experience data); Jim Mateja, Sensor Tests Risks for Insurer, CHI. TRIB., Oct. 12, 2005, at 2 (describing how one auto insurer wants to set its premiums based on information obtained from a vehicle's “black box,” which has become a standard feature of automobiles).

342 Maier, supra note 341, at 72.

343 Letter from Larry Gil, Vice President, Kansas Medical Mutual Insurance Company, to author (Oct. 30, 2005) (on file with author).

344 Maier, supra note 341, at 72-74 (discussing how Allstate and Progressive provide customers discounts based on credit ratings another other financial information). Insurers want to insurer the lower risk patients—to skim the cream—because that is where the profit is located. See supra Part II(B)(2).

345 See Generally BUREAU OF LABOR STATISTICS, U.S. DEPARTMENT OF LABOR, Actuaries in OCCUPATIONAL OUTLOOK HANDBOOK (2006), available at www.bls.gov/oco/ocos041.htm.

346 Fournier and McInnes, supra note 333, at 257.

347 McLean, supra note 327.

348 Michael Romano, Integration Demonstration, MOD. HEALTHCARE, Oct. 31, 2005, at 6-7, available at 2005 WLNR 19188717.

349 Joseph Conn, Data Dispute Continues, MOD. HEALTHCARE, Oct. 31, 2005, at 8-9, available at 2005 WLNR 18545595. JCAHO is taking a lot of heat for selling provider data, and is likely to place a moratorium on this practice. Id.

350 Joseph Conn, JCAHO Rival Emerges, MOD. HEALTHCARE, Oct. 31, 2005, at 17, available at 2005 WLNR 19188703.

351 Many hospitals are self-insured with respect to medical malpractice making information on hospital medical malpractice costs less transparent.

352 This hypothetical is based on General Electric, which in 2005 was recognized for its “lightspeed” volume computer tomography scanner while at the same time selling its Medical Protective Corporation to Berkshire Hathaway for $825 million. See e.g. Press Release, General Electric, Berkshire Hathaway and GE Complete Medical Protective Transaction (July 1, 2005), available at http://home.businesswire.com/portal/site/ge/index.jsp?ndmViewId=news_view&newsId=20050701005247&newsLang=en&ndmConfigId=1001109&vnsId=681; Press Release, General Electric, GE Healthcare's LightSpeed VCT Recognized by Wall Street Journal's Global Technology Innovation Awards (Oct. 24, 2005), available at http://home.businesswire.com/portal/site/ge/index.jsp?ndmViewId=news_view&newsId=20051024005827&newsLang=en&ndmConfigId=1001109&vnsId=681.