Trust and betrayal in the medical marketplace.

• Author: Bloche, M. Gregg

INTRODUCTION

Dr. Maris gave my mother her last laugh. (1) Every week or so, Dr. Maris, dressed in black, would approach me near the nurses' station to report that my mother had said, "It's time." At issue was the expensive bag of blood clotting cells Dr. Maris reluctantly hung over my mother's bed every few days. The cells kept my mother alive. Leukemia had destroyed her bone marrow. She couldn't make her own blood cells, and she would bleed to death unless the little, straw-colored bags kept appearing atop her IV line.

My mother's cancer was untreatable. Johns Hopkins Hospital had discharged her, and money was a problem. But her prognosis, death within weeks, made her eligible for Medicare's hospice benefit. She was a winning economic proposition for any hospice program that would take her--unless the clotting cells were part of the bargain. But my mother insisted on them, and the hospice program that admitted her went along. Weeks, though, stretched into months. My mother did not die. Instead, she kept consuming clotting cells and incurring costs above Medicare's payment rate.

My mother stayed alert, without pain, as end-stage leukemia patients commonly do until their last hours. The first time Dr. Maris told me that my mother was "ready" for the clotting cells to stop, I went into her room girded for the final farewell. She insisted she had said no such thing, and she begged me to keep the cells coming. I did so. A week later, Dr. Maris, my mother, and I repeated this cycle. It became a routine. My mother would not behave like a "good" hospice patient. She would not go without a fight, and Dr. Maris gave her one. Dr. Maris told me that the cells were a gift, wasted on my mother since she could not be saved. My mother joked about Dr. Maris's black clothes and unrelenting efforts to close the Final Sale, until, eventually, leukemia had the final say.

Did Dr. Maris's efforts to reach this endpoint more quickly break faith with her profession's Hippocratic Oath of fidelity to patients? Maybe my mother was not entitled to the clotting cells, since Medicare's hospice benefit covered only supportive end-of-life care. (2) And maybe Dr. Maris thus had no duty to provide them. If so, then perhaps Dr. Maris's penchant for reading readiness to die into whatever my mother said did not matter. Maybe my mother simply contracted out of any "right" to the clotting cells--or consented to Dr. Maris's clinical judgment about what constitutes supportive care--when she decided to use Medicare's hospice benefit. Or, maybe she kept telling Dr. Maris one thing and me another. Of one thing, though, I am sure. I felt less trust for Dr. Maris when I learned that the clotting treatments were a money-losing proposition.

1. TRUST, BETRAYAL, AND CONTRACT IN THE HEALTH SPHERE

   Anecdotes, of course, make bad policy, as both the left and the right are wont to point out when gripping stories go against them. (3) Yet in recent years, the nation has seen a proliferation of stories of breach of trust, (4) in the business and public sectors as well as in the health sphere. At Enron, WorldCom, and other firms, corporate fiduciaries--officers and directors--betrayed the faith of shareholders and employees by misstating earnings, unloading stock based on inside knowledge, and turning a blind eye toward bad behavior. (5) The accounting industry's wholesale complicity in this misconduct (6) undermined investor confidence in corporate financial reporting to a degree that has reduced the market value of publicly traded firms overall. (7) Perceptions that Enron and other firms buy unfair political influence through "soft money" campaign contributions rose to a crescendo that, in 2002, produced campaign finance reform. (8) In the health sector, revelations that managed care executives profited from withholding clinical services led to high-profile, nine-figure jury verdicts against health plans (9) and fed growing popular backlash against managed care. (10) The trustworthiness of physicians who receive monetary rewards for withholding costly treatments has become a focus of federal and state litigation. (11)

   A. The Contractarian Challenge to Trust-Supporting Legal Rules

   Whether these accounts of breach of faith and loss of confidence reflect a real drop in trust and trustworthiness or increased attention to longstanding phenomena is unclear. (12) Either way, they come at an embarrassing point for many legal scholars. For a generation or more, writers in the Chicagoan tradition have challenged traditional limits on actors' ability to contract out of--or otherwise escape--legal rules that purport to safeguard trustworthiness. In the business law context, some commentators have urged that corporate officers and directors be permitted to opt out of fiduciary duties. (13) Capital markets, these scholars contend, can be counted upon to select the most efficient management and board oversight practices, and legal rules aimed at preserving trust too often stand in the way. The contractarian critique of trust supporting legal norms has extended to the intimate sphere. Family law doctrines that limit free movement into and out of loving commitment have been condemned as obstacles to personal fulfillment. (14)

   Nowhere has the contractarian attack on trust-supporting legal rules been stronger, or more successful in changing the law, than it has been in the health sphere. Since the mid-1970s, market-oriented scholars have challenged a broad range of legal principles previously assumed to sustain the trustworthiness of physicians and health systems. Doctrines shielding physicians from antitrust law, insulating them from insurers' and hospitals' influence over clinical practice, and reinforcing the precept of undivided clinical loyalty to patients came under attack as protection for the medical profession at consumers' expense. (15) These scholars, including Clark Havighurst, Richard Epstein, and Mark Hall, urge contractual ordering of clinical standards of care; (16) relationships among physicians, hospitals, and health care payers; (17) and physicians' conflicting obligations to patients, payers, and other third parties. (18)

   Although courts have not embraced this approach wholesale, they have pushed health care law far in this direction since the 1970s. The United States Supreme Court's 1975 rejection of a "learned professions" exemption from federal antitrust law (19) not only commenced a judicial offensive against physicians' efforts to limit price competition; (20) it opened the way for use of antitrust doctrine to stop professional self-regulation of physicians' business relationships. (21) Courts have eviscerated laws barring lay management of medical decisionmaking, (22) allowed insurers to offer financial rewards to physicians for withholding costly tests and treatments, (23) and empowered employee benefits managers and health plans to contract for standards of care below those set by the medical profession. (24)

   This contractarian remodeling of the law of health care provision entailed rejection of an older wisdom. The older wisdom drew a distinction between medical professionalism and the rule of the marketplace, disdained economic competition as beneath professional dignity, demanded that physicians adhere to an ethic of fidelity to patients regardless of self-interest, and insisted on professional insulation from lay influences (public or private) on clinical judgment. (25) Adherents held that this understanding of professional obligation protected patients against exploitation, rewarded physicians with social respect, and thereby sent patients a strong message of trustworthiness. Trustworthiness mattered, this story held, because it encouraged patients to volunteer intimate facts about their lives, cooperate with diagnosis and treatment, draw reassurance from medical explanations, and experience the doctor-patient relationship itself as empowering and comforting.

   A classic article by Kenneth Arrow forty years ago conceptualized this thinking in economic terms. (26) Arrow argued, in essence, that physicians' anticompetitive cultural norms and ethic of fidelity to patients were a social welfare-enhancing response to the problem of information imbalance between medically ignorant patients and comparatively well-informed physicians. (27) The ethic of self-sacrificing fidelity reduced the risk of opportunistic exploitation of this knowledge asymmetry, Arrow held. By signaling their commitment to this ethic, he contended, physicians assuaged patients' fears of being exploited; this encouraged patients to rely upon and benefit from medical care. (28) Signaling behaviors were crucial to Arrow's account. Prohibitions against overt profit-seeking, avoidance of conflicts of interest, and provision of charity care sent the message that medicine was worthy of trust as a culture apart from the self-seeking mores of the marketplace. (29)

   Contemporary market-oriented scholars of health law and policy reject Arrow's account as "layered in amber" (30)--dated by its inattention to professional self-interest and its deference to professional norms against advertising and entrepreneurship. In support of their contractarian policy prescriptions, they point to the self-serving features of professional constraints on consumer choice, and they contend that the information asymmetry Arrow described no longer merits (if it ever did) privileging professional norms over health care buyers' choices. (31) These choices, made before the onset of medical need, from among health plans with competing approaches to management of care and costs, honor consumers' tradeoffs between medical care and other wants and needs, the contractarian story holds. (32)

   B. Selfishness-Suppressing Norms and the Case Against Contract

   These contractarian authors are at a loss to explain the popular backlash against managed care--and its intrusions upon professional authority--that began in the...