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The Malpractice Standard under Health Care Cost Containment

Published online by Cambridge University Press:  29 April 2021

Mark A. Hall
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Extract

For decades, medicine has been dominated by a “spare-no-expense’’ philosophy that fostered an ethic of providing all care that is of any conceivable benefit, regardless of the cost. This extended financial honeymoon has now ended. Sweeping reimbursement reform is limiting payment for health care under both public programs and private insurance. As physicians respond to this emerging cost consciousness in health care by declining to perform procedures once considered necessary, will they be exposed to liability or will legal standards shift to accommodate the new constraints? This dilemma is one of the most important issues that will confront health care tort law throughout the remainder of the century.

The potential conflict between malpractice law and cost containment has received considerable scholarly attention over the past dozen years, particularly following the 1983 reform of the Medicare program and the 1986 California appellate decision in Wickline v. State of California concerning that state's Medicaid program.

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Article
Information
Law, Medicine and Healthcare , Volume 17 , Issue 4 , Winter 1989 , pp. 347 - 355
Copyright
Copyright © American Society of Law, Medicine and Ethics 1989

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References

In 1975, Randall Bovbjerg wrote the definitive analytical work on the application of malpractice doctrine to HMOs and Curran, William J. and Moseley, George B. provided an important empirical study of HMO malpractice experience. Bovbjerg, “The Medical Malpractice Standard of Care: HMOs and Customary Practice,” 1975 Duke L. J. 1375; Curran, & Moseley, , “The Malpractice Experience of Health Maintenance Organizations,” 70 Nw. U. L. Rev. 69 (1975). In 1981, the Texas Law Review published a lengthy debate among James Blumstein, Rand Rosenblatt, and Peter Schuck about precisely this issue. Blumstein, “Rationing Medical Resources: A Constitutional, Legal, and Policy Analysis,” 59 Tex. L. Rev. 1345 (1981); Rosenblatt, , “Rationing ‘Normal’ Health Care: The Hidden Legal Issues,” 59 Tex. L. Rev. 1401 (1981); Schuck, , “Malpractice, Liability and the Rationing of Care,” 59 Tex. L. Rev. 1421 (1981). (Blumstein and Rosenblatt carried their debate over into volume 60 of the Texas Law Review, but the issues discussed there do not relate to malpractice.)Google Scholar
192 CaApp l. 3d 1630, 228 CaRptr l. 661 (1986).Google Scholar
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75 Cal. Rev L. 1719 (1987) (published summer 1988) [cited hereinafter as “Morreim”]. For a condensed version of the same argument, see Morreim, “Cost Constraints as a Malpractice Defense,” 18 Hastings Ctr. Rep. 5 (Feb/March 1988).Google Scholar
The following is my informal tally on scholarly opinion about the law's change in the face of cost containment (including Morreim and myself): Google Scholar
For example, her introduction states: “Should [physicians] be held legally liable for the medical consequences of others' economic decisions? Or, as health care resources become increasingly stratified, should the standard of care become similarly stratified? Currently, the law answers this question with an emphatic ‘no,’” Morreim at 1724. Subsequent discussion reveals that she is answering the second question, and that this answer refers to the descriptive aspect of the question (whether the law will change), not its normative aspect, as might be supposed by her use of “should.”Google Scholar
Even in her proposed solution to the problem, Morreim's writing bristles with hedges: “the proposal raises a question nearly as large as that which it purports to answer;” “some new rules of discovery might be needed;” “we cannot entirely answer this difficult question satisfactorily”. Id. at 1757, 1758, 1758, 1762.Google Scholar
Morreim at 1724–25.Google Scholar
Morreim at 1725.Google Scholar
Wennberg, McPherson, & Caper, , “Will Payment Based on Diagnosis-Related Groups Control Hospital Costs?,” 311 New. Eng. J. Med. 295 (1984); Wennberg, & Gittelsohn, , “Variations in Medical Care Among Small Areas,” 246 Sci. Am. 120 (April 1982); Wennberg, & Gittelsohn, , “Small Area Variations in Health Care Delivery,” 182 Science 1102 (1973). Equally egregious variations have been documented for other medical procedures, including a 17-fold variation in test ordering within a single hospital.Google Scholar
Studies are collected and discussed in Paul-Shaheen, Clark, & Williams, , “Small Area Analysis: A Review and Analysis of the North American Literature,” 12 J. Health Politics, Policy & Law 741 (1987).Google Scholar
See Morreim at 1735 (“The law does not require slavish adherence to custom…. [It] allow[s] for the diversity of approaches that inevitably arise[] out of scientific and practical uncertainties”).Google Scholar
Chumber McClure v., 505 F.2d 489, 492 (6th Cir. 1974) (judgment for physician properly ordered where “the testimony…[showed at most] a division of opinion in the medical profession regarding the use of [a particular medication]”).Google Scholar
See Wennberg, Freeman, & Culp, , “Are Hospital Services Rationed in New Haven or Over-Utilised in Boston?” 1987:1 Lancet 1185.Google Scholar
192 CaApp l. 3d 1630, 228 CaRptr l. 661 (1986).Google Scholar
Other plausible explanations are that fee-for-service practice patterns are so inflated that this substantial reduction has not affected the quality of care, or that HMOs are more successful at resolving malpractice claims through settlement or arbitration.Google Scholar
“Physicians are allowed to set their own standards only so far as they uphold the existing quality of basic care…. [For change to occur, the law] would have to embrace the [] idea that it is acceptable actually to reduce the quality of health care…in order to conserve resources. Yet existing malpractice law effectively precludes this very step.“Morreim at 1735–36. “Where courts allow deviations from custom, they generally insists that the deviations improve, or at least preserve, the basic level of care”. Id. at 1733.Google Scholar
Blumstein, , supra note 1, at 1396.Google Scholar
Aaron, H. & Schwartz, W., The Painful Prescription: Rationing Hospital Care (1984). This observation is taken from Kapp, supra note 3, at 250.Google Scholar
519 P.2d 981 (Wash. 1974).Google Scholar
E.g., Schuck, supra note 1, at 1421.Google Scholar
Id. at 983. This is not to say, however, that the decision was correct in all respects. The court almost certainly was incorrect in its analysis of the facts, since pressure tests are not costless either in economic or medical terms. See Bovbjerg, supra note 1, at 1390; Fortess & Kapp, “Medical Uncertainty, Diagnostic Testing, and Legal Liability,” 13 Med L. & Health Care 213 (1985). But it was at least correct in its basic analytical framework.Google Scholar
Morreim, at 1733. See also Blumstein, , supra note 1, at 1397; Havighurst, , Altering the “Applicable Standard of Care” 49 L. & ContemProb p. 265, 269 (1986).Google Scholar
One is tempted here to cite as precedent Zeno's failure to prove that it is impossible for an arrow to traverse a stadium.Google Scholar
Hood Phillips v., 554 S.W. 2d 160, 165 (Tx. 1977) (emphasis added) (rejecting an instruction to the jury that creates the impression that “the standard for malpractice is to be determined by a poll of the medical profession”).Google Scholar
For further development of this distinction, see King, “In Search of a Standard of Care for the Medical Profession: The ‘Accepted Practice’ Formula,” 28 Vand. L. Rev. 1213 (1975).Google Scholar
The primary reason is the difficulty the rule creates in securing a qualified expert to testify about the prevailing standard of care. The secondary reason is that, by localizing the custom standard, the rule made it too easy for Justice Hand's oft-quoted warning to come true that “a whole calling may have unduly lagged in the adoption of new and available devices.” Hooper, T.J., 60 F.2d 737, 740 (2d Cir. 1932).Google Scholar
See King, J., The Law of Medical Malpractice 60 (2 ed. 1986).Google Scholar
Shilkret v. Annapolis Emergency Hospital, 276 Md. 187, 349 A.2d 245 (1975).Google Scholar
Hall Hilbun v., 466 So.2d 856, 873 (Miss. 1985) (“[Past case law] has embraced what many call the ‘national standard of care.’…. [W]e have added to [it] a pragmatic addendum by today's recognition that the physician's duty of care must take into consideration the quality and kind of facilities, services, equipment and other resources available.”) See Birchfield v. Texarkana MeHosp m.., 747 S.W.2d 361, 366 (Tex. 1987) (jury charge that defined negligence as “ordinary care…under the same or similar circumstances” is sufficient to describe the locality standard “because the means available to the [provider] are part of the pertinent ‘circumstances’”).Google Scholar
Morreim, at 1730.Google Scholar
Karlson, & Erwin, , “Medical Malpractice: Informed consent to the Locality Rule,” 12 Ind. L. J. 653, 664–67 (1979).Google Scholar
Morreim, at 1759.Google Scholar
I borrow this image from Furrow, supra note 3.Google Scholar
Har Note v., supra note 3, at 1018, makes this argument.Google Scholar
Rosenblatt, , supra note 1, at 1418, has done the best job of articulating this point.Google Scholar
See Blumstein, , supra note 1, at 1353–54.Google Scholar
See Rosenblatt, , supra note 1, at 1418 (summarizing literature).Google Scholar
E.g., Buffalo Comment, supra note 3, at 1027 (“It is well established that medical necessity should dictate the level of treatment provided. Physicians and hospitals are under a legal duty, once treatment has begun, to provide all care necessary to treat each patient”); Washington Note, supra note 3, at 805 (“the duty of care…cannot depend on whether payment to the hospital or physician is limited”); Har Note v., supra note 3, at 1019 (“victims of medical mishaps should not…be denied compensation on the ground that their injuries resulted from cost-cutting measures, no matter how ‘reasonable.’”).Google Scholar
Danzon, , The Medical Malpractice System: Facts and Reforms 29 (Brookings Institute 1985).Google Scholar
Morreim, at 1757, 1759, 1762.Google Scholar
Morreim, at 1757–58.Google Scholar
Morreim, at 1759.Google Scholar
Morreim, at 1745.Google Scholar
See note 22 supra.Google Scholar
Generally, cost effectiveness studies only tell us the relative cost effectiveness of various procedures. See Eddy, et al. , “The Value of Mammography Screening in Women Under Age 50 Years,” 259 J.A.M.A. 1512 (1988); Doubilet, Weinstein, & McNeil, , “Use and Misuse of the Term ‘Cost Effective’ in Medicine,” 314 New Eng. Med, J.. 253 (1986); Weinstein, & Stason, , “Foundations of Cost Effectiveness Analysis for Health and Medical Practice,” 296 New Eng. Med J. 716 (1977).Google Scholar
Morreim, at 1763. Thus, when Morreim contends that her approach “can help direct us toward the forum in which resource allocation questions must ultimately be answered: Society as a whole” id. at 1762, it appears that she cites as one advantage of her approach its likely failure!Google Scholar
This is the subject of one of Morreim's works in progress, though.Google Scholar
Bovbjerg, , supra note 1, at 1392–1408, does the best job in the existing literature, although I believe much more remains to be said.Google Scholar
Ordinarily, evidence of custom merely provides relevant evidence of the reasonableness of conduct. For physicians, though, custom has become nearly determinative of liability. Prosser and Keeton on Torts 189 (4th ed. 1984).Google Scholar
Bovbjerg, , supra note 1, at 1392–94; Pearson, “The Role of Custom in Medical Malpractice Cases,” 51 Ind. L. J. 528, 534 (1976).Google Scholar
Havighurst, , “Private Reform of Tort-Law Dogma: Market Opportunities and Legal Obstacles,” 49 L. & ContemProb p. 143, 159 n.45 (1986).Google Scholar
Posner, R., Economic Analysis of Law 6.3 (3rd ed. 1986).Google Scholar
This is not to say that the health care market will work perfectly now. Clearly, significant market defects remain that potentially affect quality determination. See Jost, “The Necessary and Proper Role of Regulation to Assure the Quality of Health Care,” 25 Hous. L. Rev. 525, 558–72 (1988). But these defects preexisted cost containment and the extent of their impact is an issue for empirical verification. Cf. text at notes 35–38 supra.Google Scholar
For example, in response to complaints from the medical profession, Congress enacted a ban on hospital incentive plans designed to pass through to doctors some of the constraints imposed on hospitals by Medicare's new payment system. 42 U.S.C. 1320a-7a(b) (1986). Congress is now studying whether the same ban should be extended to HMOs. Hall, “Institutional Control of Physician Behavior: Legal Barriers to Health Care Cost Containment,” 137 U. Penn. L. Rev. 431, 489 (1988).Google Scholar
See Bovbjerg, , supra note 1, at 1411; Pearson, supra note 51, at 528, 537 (“There is no need for courts to act as a source of pressure to compel the medical profession to give adequate consideration to patient safety and well-being, since the forces that operate with the profession make such extra-professional pressure unnecessary.”)Google Scholar
Indeed, the greater danger, as I argue at length elsewhere, is that the medical profession will err in the other direction, by resisting too strongly the needed forces of change. Hall, supra note 55.Google Scholar