TY - JOUR
AU1 - Rosenbaum, Sara
AB - The evolution of US law has had an enormous influence on medicine as a profession, and much of this legal evolution can be attributed to changes in the science and practice of medicine. This changing legal framework and its intersection with medicine has many facets. Three of the most important facets concern the evolution of the no duty-to-treat principle and the role of modern health care financing and civil rights law in altering this rule, the manner in which advances in medicine led courts and legislatures to change the standards against which professional medical liability is measured, and the basic loss of highly preferential treatment under US laws aimed at preventing anticompetitive conduct by businesses. However, despite the impact on the profession of an evolving legal system, concern over the integrity of medical professionalism continues to significantly influence both laws and lawmakers, including legislatures, regulatory agencies, and the courts.As culture made progress . . . the priest-physician was found ever in the forefront . . . What was true as to influence wielded by the medicine man of the ages past ought to be and will be many times manifolded for the enlightened medical man of to-day. . . . The writer expects to see the day when the laws of the states shall provide that one chair in every council, commission and legislative body to be filled by a medical man. The people will demand this and the law will give it; we have only to stay awake and be aggressive . . .—Edgar J. Spratling, 1902In 1902, when Edgar J. Spratling, MD, spoke these words before the 53rd annual meeting of the Georgia Medical Association, belief in the political dominance of medical professionalism was not simply wishful thinking. As Paul Starr has chronicled in The Social Transformation of American Medicine: The Rise of a Sovereign Profession, by 1900 physicians were rapidly ascendant in the US social order, aided by what Starr terms "lay deference and institutionalized forms of dependence."Physicians' influence could be seen not only in the esteem in which they were held by patients, but also in the extent to which deference to the profession was incorporated into the nation's very legal fabric. The profession's influence in the first two thirds of the 20th century was evident in the laws that defined medical practice and its attendant obligations. Deference to the medical profession was equally clear in the legal standards that courts used to measure liability for medical injuries, as well as insurance laws and the legal doctrines that applied to business competition.A century later, the influence of the medical profession over law, while still considerable, has been diminished in certain fundamental respects. Physicians now practice under significantly expanded legal obligations, face stricter standards of professional accountability for medical negligence, and no longer enjoy exemption from the laws of competition. This shift in legal standards is consistent with the general transformation of the world in which physicians live and practice. Legal scholar Lawrence Friedman has written that the law represents a collective effort on society's part to define formal standards of conduct.Thus, as society changes, its legal doctrines inevitably do so as well, with major implications for those members who previously might have enjoyed preferred status.It should not be surprising that the profound shift toward egalitarianism that occurred over much of the 20th century and reshaped our national character and our laws, would have altered this deferential treatment of the profession. The continuing ability of medicine to shape law is readily apparent. This ability is evident in the high priority placed on medical malpractice reform by both the Bush Administration and the current Congress.Nonetheless, physicians' position within the US legal system is neither as lofty nor as protected as it was previously. Courts have lifted the legal shield that sheltered physicians from liability for medical care price fixing. Civil rights laws and laws regulating the conduct of medical care institutions have imposed new service obligations on physicians. Laws in virtually all states have been modified to permit some level of medical practice by additional classes of health professionals.The advent of vertically integrated medical care corporations that contract with physicians and physician networks has rendered laws against the corporate practice of medicine effectively obsolete. Although clinical judgment still plays a critical role in cases involving the professional standard of care for both coverage and liability, courts also have broadened the evidence they consider, and indeed, have shown their willingness to disregard the professional standard entirely when the evidence shows that the standard is either unreasonable or irrelevant. In summary, modern legal principles temper this historic deference to the medical profession in ways that have in turn strongly influenced medicine as a profession.The interaction between physicians and the US legal system is one of the most fascinating and dynamic areas of law, encompassing not only classic questions of professional liability but also the very heart of how the modern medical enterprise is organized, financed, overseen, and held accountable for both business conduct and its broader social obligations. For this reason, it is not merely lawyers who need to understand health law. Health law has become a staple of teaching across the health professions. In the 2002 report by the Institute of Medicine, entitled Who Will Keep the Public Healthy? Educating Public Health Professionals for the 21st Century,law is identified as a major area of study in modern public health training. Numerous medical centers offer law courses for medical professionals in recognition of the power of law to shape medical practice.This article traces the evolution of various portions of the legal framework for medicine. This evolution has not been linear. Law develops for many reasons and spans vast disciplinary areas. It is therefore entirely possible for medicine to be profoundly affected by legal developments that at least superficially do not appear to conern health care at all. Indeed, the evolution of the medicine/law relationship has been punctuated by periodic and explosive confrontations between a rapidly changing health care system and enormous bodies of law, such as corporate law, the law of contracts, administrative law, tort law, tax law, antitrust law, consumer protection law, civil rights law, criminal law, and labor law, just to name a few, which have no particular regard for medical care or physicians and which operate according to their own internal principles. In some cases, this clash yields sensible results; in other cases, the results may be at direct odds with the medical profession's notions of sound health policy. When major clashes between law and medical care do occur, the power of medicine is such that in due course (ie, lawmakers, judges, legislatures, and regulators) tend to seek approaches that will accommodate the medical profession's concerns. But inevitably, the practice of medicine changes in response to a changing legal framework. As will be discussed in this article, the transformation of the US medical care system over the past 2 decades, from fee-for-service to what is commonly called managed care, offers just such an example of the law's profound effect on how medicine is practiced, as well as the law's more recent efforts to mitigate the more extreme results of its own handiwork.This article is intended to illustrate the evolution of medicine and law through 3 legal stories, each chosen for its importance to the field of law and medicine. In each case, the materials used to shape the story come from judicial decisions and legislation that are generally regarded as legal landmarks, as reflected in standard health law textbooks.Each of these 3 complex legal stories is notable for providing insight into how law changes medicine and for its power to reveal how medical developments can alter how the law views medicine and the role of physicians within society.The first story focuses on one of the most fundamental questions in health law, namely whether physicians have a legal obligation to treat all individuals who seek medical care. The second story focuses on the evolution of the law of professional medical liability. The final story examines, from the perspectives of both supply and demand, the evolution of laws governing the business of health care, using medical price fixing and medical staff privileges as examples.FROM NO DUTY-TO-TREAT TO PLACES OF PUBLIC ACCOMMODATIONThe No Duty-to-Treat PrinciplePerhaps the most basic question that can be asked in health law is whether Americans have a legal right to health care. The answer to this question is essentially no. At the same time, however, how the US law has evolved is important to address.The US legal system does not recognize either a federal constitutional or a legal right to rescue, not even an emergency rescue by government itself in cases in which public officials have knowledge of life-threatening situations.A compelling example of this principle in a private context can be found in Hurley v Eddingfield,a decision made in the early 20th century by the Indiana Supreme Court that was viewed as a seminal statement of the US legal standard regarding licensed physicians' legal duty to treat individuals even in medical emergencies. Hurley v Eddingfieldwas a civil wrongful death action brought against a physician who, early one morning in 1899 and "without any reason whatever," refused to render aid to a woman dying in childbirth. The physician persisted in his refusal to come to her aid, despite that the defendant had been the family's physician and that, as the woman lay dying, her husband made 3 separate entreaties for help, even tendering an advance fee in his final urgent request.In ruling in favor of the physician, the Indiana Supreme Court rejected the claims of the administrator of the decedent's estate, who argued that Indiana's newly enacted medical licensure law conferred certain legal "public accommodation" obligations on licensees, one of which was to render emergency treatment when an offer to contract for medical care was made. Dismissing the argument that licensure conferred such a duty-to-treat obligation on physicians, the Indiana Supreme Court offered the following explanation of the role of medical licensure: "The [state licensure] act is a preventive, not a compulsive, measure. In obtaining [a medical license] the state does not require, and the licensee does not engage, that he will practice at all or on other terms than he may choose to accept."The Indiana Supreme Court thus articulated a basic social view of physicians and the role of medical licensure, namely, that licensure was a means of protecting the public from fraud and quackery, not a tool for ensuring access to basic medical care. Physicians were viewed as private franchises, free to sell their services to the buyers of their choosing. Many physicians followed the moral and ethical precepts that society typically associates with medicine and provided medical services selflessly. And perhaps for that reason, Hurley v Eddingfieldis relatively easy to understand: the notion of imposing on the medical profession a legal obligation to serve, even in times of medical emergency, could have made medical practice untenable and moreover, could have been perceived as an expression of distrust in physicians to do the right thing. Under principles of common law (ie, judge-made law), the notion that a commercial entity could be a place of public accommodation was limited to public enterprises, such as inns, which for safety reasons were considered to have a legal duty to serve members of the paying public, such as travelers. The proposition that medical licensure conferred public accommodation status not only conjured up a disturbing image of physicians as commercial enterprises forced to act in the public good but also threatened to drive physicians out of sparsely populated communities where the burden of service soon could have become unbearable.While the decision of Hurley v Eddingfieldmay be understandable from a historical perspective, the no duty-to-treat principle retained a remarkable grip on the law, even as medical care became both increasingly important to society, plentiful in nature, and well-financed. An example is the decision of Campbell v Mincey,a 1975 case from Mississippi decided years after courts and legislatures in some states had begun to temper the no duty-to-treat doctrine in the case of hospital-based medical emergencies.In Campbell v Mincey, a federal judge ruled that Mississippi's common law principles spared hospitals from any legal duty to admit and treat emergency patients. Thus, a county hospital had no duty to assist the African American woman who arrived in the middle of the night in emergency labor and who subsequently gave birth in the facility parking lot.Calling the incident "normal in all respects other than the location," the court concluded that as long as the custom of the hospital's medical staff was not to admit patients who did not have a personal physician with staff privileges (a rule used widely in the South after desegregation to maintain previously segregated facilities),the court would continue to honor the practice of the no duty-to-treat principle in the absence of modifying state statute. Rejecting the argument that the law had evolved to favor the imposition of a duty-to-treat obligation in the case of medical emergencies, the trial court clinched the deal by concluding that the African American woman who delivered her baby in a parking lot could not be considered a medical emergency and determined that her "delivery and post-partum recovery was uneventful except for a loss of blood during the ambulance trip."Tempering the No Duty-to-Treat Principle: The Emergency Medical Treatment and Active Labor Act and Civil Rights LawsIn time, the no duty-to-treat principle would be modified in limited but significant ways in the context of both emergency hospital care and office-based medical practice.Emergency Hospital Care.As noted, by the 1960s, certain courts and legislatures had begun to articulate a duty of care on hospitals with emergency facilities, reflecting modern licensure and accreditation standards as well as social expectations about the changing role of hospitals.A duty to provide both free medical care and services for the community also was reflected in the federal conditions applicable to grantees under the federal Hospital Construction and Survey Act of 1946 (Hill-Burton Act),although judicial interpretation of this legislation as creating such duties did not materialize until decades after the law's passage.The most remarkable advance in social thinking about the duty of hospitals and medical staff to treat emergency cases occurred with the 1986 passage of the Emergency Medical Treatment and Active Labor Act (EMTALA).EMTALA obligates all Medicare-participating hospitals with emergency departments both to screen (ie, examine) persons who seek care for emergency conditions and to either medically stabilize or appropriately transfer persons found to have an emergency medical condition. The definition of emergency medical condition also includes women in active labor.EMTALA has been a subject of exhaustive litigation since its enactment, and the law's potential sweep has been tempered in a number of respects.For example, courts have interpreted the law's screening requirements to require only nondiscrimination in medical care and not as establishing a reasonable standard of medical care as a matter of federal law. As a result, even a professionally incompetent medical examination that leads a physician to conclude that no medical emergency exists does not violate the law, as long as no evidence exists of discrimination in screening.At the same time, the obligations to assess for emergencies, and to stabilize or to appropriately transfer if one is found, are absolute. Just how absolute EMTALA duties can be—even where stabilizing intervention is at odds with sound medical judgment—is strikingly illustrated by an extraordinary and controversial case from the mid-1990s titled In the Matter of Baby K.In the Baby Kcase, a mother of a baby born with anencephaly insisted on medical treatment for her child's apnea each time the infant stopped breathing, not only at birth but at each subsequent instance when the baby was rushed to the hospital emergency department. The hospital sued to obtain a ruling that failure to stabilize where treatment was futile did not amount to a violation of its emergency care duties. It argued that federal law did not compel stabilizing treatment at odds with reasonable medical standards, which, in this case, involved care as warmth and comfort. Rejecting the hospital's argument that the focus should be on the standard of care for the underlying condition, the court of appeals concluded that the law required a focus on the presenting medical emergency, in this case apnea, and affirmed the duty-to-treat principle regardless of the patient's underlying condition:The Hospital asserts that . . . a requirement to provide respiratory assistance would exceed the prevailing standard of medical care. However, the plain language of EMTALA requires stabilizing treatment for any individual who comes to a participating hospital, is diagnosed as having an emergency medical condition, and cannot be transferred. . . . The Hospital has been unable to identify . . . any statutory language or legislative history evincing a Congressional intent to create an exception to the duty to provide stabilizing treatment when the required treatment would exceed the prevailing standard of medical care. We recognize the dilemma facing physicians who are requested to provide treatment they consider morally and ethically inappropriate, but we cannot ignore the plain language of the statute. . . . The appropriate branch to redress the policy concerns of the Hospital is Congress.The court's decision effectively treated EMTALA as a collective societal decision to override the professional standard of medical care in favor of a duty that emanates from a greater perceived social value, namely the obligation not to discriminate in the provision of stabilizing treatment against any person with a medical emergency, regardless of underlying condition. As a result, the Baby K case evoked extensive commentary.Congress has retained the strict duty to stabilize even in the face of such a controversy and the attendant pressures that the law has placed on hospitals and their medical staff.Civil Rights Laws.Equally significant—and more far reaching in the private medical care context—has been the impact of civil rights law on the no duty-to-treat principle. Two laws deserve particular focus: Title VI of the 1964 Civil Rights Actand the Americans with Disabilities Act (ADA).Both laws offer evidence of society's willingness to limit physician discretion over patient care undertakings where the broader goal of nondiscrimination is at stake.Title VI was passed as part of the landmark Civil Rights Act of 1964.This legislation, considered by many historians to be President Lyndon Johnson's crowning achievement, was enacted to prohibit discrimination in both places of public accommodation and federally assisted programs and activities. In keeping with its historical roots, the concept of "places of public accommodation" was restricted under Title II of the Act to hotels, restaurants, places of entertainment, and public conveyances. Title VI, however, extended the concept of a federally assisted program or activity to recipients of "federal financial assistance," and it broadly defined the term to encompass virtually all forms of federal financial payments. Regulations implementing Title VI prohibit all forms of discrimination, whether intentional or de facto (disparities-causing conduct that is not intentional) and empower the federal government to enforce the law through various means, including withholding of federal funds.The application and enforcement of Title VI in a medical care context has been complex and controversial, and the history of civil rights enforcement in medical care is one of limited success and large-scale resistance.In his history of medical care and civil rights, David Barton Smith chronicles the battle over the extension of Title VI to health care facilities as well as the law's role in the enactment of Medicare.Indeed, the threat posed by the Civil Rights Act of 1964 to support from the southern states for Medicare's passage became so apparent that the Johnson Administration made an oral promise to exempt physician payments under Medicare Part B from the definition of federal financial assistance under Title VI. At the same time, federal agencies only obliquely referenced this Medicare exemption through the definition of what constitutes federal assistance, and no formal regulatory exception for Medicare was ever issued. No similar exemption was created for physicians under other forms of federal financial assistance, such as Medicaid.The Johnson Administration's oral promise was predicated on Medicare's original indemnity structure, under which no funds passed directly from the federal government to physicians.As Medicare has evolved into a program of direct participation, the logic of this oral promise has effectively evaporated. It is unclear whether this shift in the nature of Medicare (in particular, where physicians receive payments directly from the government or a Medicare + Choice contractor) creates legal obligations under Title VI in the case of office-based physicians. If the basis for Medicare's exemption has disappeared, then Policy Guidance on the Prohibition Against National Origin as It Affects Persons With Limited English Proficiency, which was promulgated by the Clinton Administration in 2000and repromulgated by the Bush Administration in 2002,would appear to apply to physician practices.Even more striking from a legal standpoint is the ADA. Through this landmark extension of civil rights protections to qualified persons with disabilities, private medical care offices finally have been classified as true places of public accommodation, thereby imposing nondiscrimination duties regardless of the presence of federal funding. Enacted in 1990, the ADA outlaws discrimination and segregation based on disability.Title III of the ADA prohibits discrimination by "places of public accommodation." However, unlike Title VI, the ADA defines a place of public accommodationto include private medical care offices.Virtually no legislative history exists to explain this historic decision by Congress to expand the concept of a public accommodation, but disability rights experts involved in the passage of the law have pointed to the active support of medical societies during its consideration.The public accommodations provisions of the ADA stand as the strongest legal statement to date regarding society's willingness to temper physician autonomy where broader social concerns are at stake. Just how strong a statement the ADA represents in this regard became clear in Bragdon v Abbott.This landmark case is best known for the decision by the US Supreme Court to classify asymptomatic human immunodeficiency virus as a qualified disability under the ADA. But what is important for purposes of this story is that the case involved the refusal of a dentist, citing personal safety concerns, to provide routine treatment in his office to a patient who was positive for the human immunodeficiency virus. Declaring the dental practice to be a place of public accommodation within the meaning of Title III, the Supreme Court not only applied the ADA to private medical practices but further held that to avoid treatment, a health professional had the burden of producing objective and reasonable evidence of significant risk and could not rely on subjective professional opinion. Thus, Bragdon v Abbottis important not only for its classification of medical practices as places of public accommodation but also for its insistence on objective medical evidence rather than subjective professional opinion.The legal evolution of the no duty-to-treat principle illustrates society's willingness to curtail professional medical autonomy when broader social concerns, such as access to health care in medical emergencies, nondiscrimination against persons based on race, national origin, or disability, are at issue. Presently, most medical care undertakings are still at the election of physicians. Furthermore, in the modern health system, physicians themselves voluntarily set aside their discretion to select patients each time they sign an agreement with a managed care provider network that obligates them to treat all persons enrolled in any health plan offered by the company in whose network they participate.But the evolution in public law points to the nation's willingness to offer the legal context in which medicine is practiced in profound ways.Legal Liability for Medical Negligence: The Evolution of the Professional Standard of CareIn contemporary society, it is a given that external entities (ie, peer review authorities, public and private payers, and others) should be actively involved in monitoring and measuring the quality of health care, using various types of objective evidence. Yet from a historical perspective, this notion of external accountability under objective standards is a relatively recent event. The evolution of medical negligence litigation is one way of understanding how much professional accountability for medical error has changed.In medical negligence litigation, it is the purview of the courts to ascertain whether a medical professional's conduct in a particular instance falls below an acceptable "professional standard of care," and if so, whether that conduct was a proximate cause of the patient's death or injury.Therefore, critical to the decisions on medical negligence cases, whether they involve individual physicians, hospitals, or medical care corporations, such as health maintenance organizations, is the type of evidence that courts will consider in determining both the professional standard as well as its alleged breach.During the past 2 centuries, medical negligence has come to represent one of the clearest examples of how courts have moved away from virtual deference to the subjective opinion of individual physicians and toward a more objective standard built on a range of evidence drawn from national standards of medical practice and extending beyond the judgment of a treating physician and his or her local colleagues. This movement away from total deference to local judgment toward a more critical view of the medical conduct of individual professionals came about only through the rejection of certain longstanding legal tenets in the area of professional medical liability. The transformation of medical negligence jurisprudence flowed in great part from advances in medicine and science. But the willingness of courts to not only set aside but, in some cases, also override the opinions of professionals is a product of a more egalitarian approach to the question of when the law should demand accountability for death or injury.English common law cases from the 18th century established the original parameters of medical negligence cases. Through these cases, 2 tenets of jurisprudence took hold. The first tenet was the rule of the profession, also known as the professional standard. For example, the decision in Slater v Baker and Stapeltondelineated the evidence that would be used to ascertain the standard of medical care against which physicians would be judged when sued for damages arising from professional negligence: "the usage and law of surgeons . . . the rule of the profession as testified to by surgeons themselves." The practical import of this rule regarding admissible evidence regarding the professional standard of care assured that only the opinion of other medical professionals would be relevant evidence in setting the standard. Evidence from other sources, such as developments in science, might have no legal relevance in a medical negligence case if it departed from professional opinion.The second legal tenet was the "locality rule." This rule determined the "geographic scope by which the [professional] standard was to be measured"and thereby served to limit to a single locality the geographic range within which an expert's testimony would be considered legally relevant. The locality rule was set forth in Small v Howard,in which the Massachusetts Supreme Judicial Court held that a small-town physician was "bound to possess that skill only which physicians and surgeons of ordinary ability and skill, practicing in similar localities, with opportunities for no larger experience, ordinarily possess."Coupled with the professional standard, the locality rule served to shield physicians against medical negligence suits, particularly those brought against small-town physicians. In essence, a plaintiff in a malpractice case was limited in his or her evidence to the professional standard of that locality and was obligated to produce an expert from the same (or perhaps a highly similar) locality. These twin litigation requirements essentially obliterated legal liability actions.It took until the latter part of the 20th century for law to catch up with the changes in medicine and for the locality rule to recede in favor of a national standard of medical care, particulary in the area of specialty care. This standard, articulated in the 1975 case of Shilkret v Annapolis Emergency Hospital Association,is"that degree of care and skill which is expected of a reasonably competent practitioner in the same class to which he belongs acting in the same or similar circumstances. . . . [A]dvances in the profession, availability of facilities, specialization or general practice, proximity of specialists and special facilities, together with all other relevant considerations, are to be taken into account."Once the professional standard evolved into one grounded in a broad array of evidence drawn from a national base, the admissibility of national expert testimony was accepted, along with the use of other evidence regarding medical practice standards. Indeed, the need to ground evidence in rigorous science has become so important that in a series of recent cases, the US Supreme Court has emphasized the role of courts in assuring the relevance and reliability of scientific evidence and testimony, including medical evidence.Even more striking perhaps are those few cases in which a professional standard is set aside based on evidence that no matter how widely supported, the standard is objectively unreasonable in light of the state of knowledge and the relatively modest cost of safer practices. The origins of this objective reasonableness standard when evaluating an industry's practices can found in the landmark case The T. J. Hooper.In this 1932 case, a tugboat without a radio caused a major accident. In finding liability, even though it was neither the custom nor the practice among tugboats at that time to equip themselves with radios, the US Court of Appeals turned to a basic reasonableness standard. Writing for the court, Justice Learned Hand stated:There are yet, not doubt, cases where courts seem to make the general practice of the calling the standard of proper diligence. . . . Indeed, in most cases reasonable prudence is in fact common prudence; but strictly it is never its measure; a whole calling may have unduly lagged in the adoption of new and available devices. It may never set its own tests however persuasive be its usages. Courts must in the end say what is required; there are precautions so imperative that even their universal disregard will not excuse their omission.The most famous application within a medical context of the rule articulated in The T. J. Hoopercase came in Helling v Carey.In Helling v Carey, an ophthalmologist was found liable for professional negligence in failing to provide a standard, low-cost glaucoma test to a 32-year-old woman, who subsequently lost her vision. The Washington State Supreme Court, relying on the reasoning of The T. J. Hooper, upheld the liability verdict, rejecting the notion that failure on the part of national opthalmological societies to recommend early glaucoma screening constituted a winning defense, given the low cost of the screen in relation to the effect of glaucoma. In Helling v Carey, as well as in other medical negligence cases in which defendants are held to standards not yet adopted throughout the profession,it is possible to see how legal standards of what is reasonable within the context of an individual patient case can propel an entire industry forward technologically, particularly where a new technology is relatively low in cost in relation to the damage that might ensue in its absence.To be sure, defenses to allegations of negligence under the modern and tougher professional standard of medical care do exist. A physician may claim a "resource based" defense in certain jurisdictions; under this defense, the physician must show that his or her knowledge was sound but local conditions led to a lack of necessary resources to meet the standard of care.Courts also may recognize a "two schools of thought" affirmative defense to charges of negligence; in such a defense, the physician has the burden of showing that a large minority of physicians, as testified to by experts using medical evidence, have adopted an alternative approach to the management of a condition. But even these defenses entail an obligation to prove the reasonableness of conduct within a national knowledge base context and through the use of a wide range of evidence.Legal jurisprudence has developed an especially nondeferential standard in the area of patient informed consent. The necessity of consent to medical treatment has been recognized in US jurisprudence for decades; in the 1914 landmark medical injury case of Schloendorff v Society of New York Hospital,Judge Benjamin Cardozo, who later became a US Supreme Court Justice, wrote that a patient has the fundamental "right to determine what shall be done with his own body; and a surgeon who performs an operation without his patient's consent commits an assault for which he is liable in damages." Judge Cardozo's opinion on autonomy is regarded as a legal classic; at the same time, during the time of the Schloendorff v Society of New York Hospitalcase, consent was assumed so long as a patient did not object when a physician said that treatment was necessary.The case of Canterbury v Spenceris commonly recognized as a watershed in US law. This case involved a young federal employee who had permanent injuries when he received back surgery without being fully apprised of its risks. The case was decided virtually simultaneously with the electrifying discovery of the 40-year-old Tuskeegee Alabama syphilis experiment involving the withholding of medical care from hundreds of African American men with syphilis without their informed consent.The author of Canterbury v Spencewas Judge Spottswood Robinson, who was one of the nation's foremost civil rights lawyers, and had represented 1 of the 3 groups of plaintiffs whose consolidated cases made up the landmark case Brown v Board of Education.In articulating what is regarded as the basis of the modern legal doctrine of informed consent, Judge Robinson concluded that the standard for measuring an informed consent should be patient-centered rather than based in professional custom, because professional custom played no role in the formulation of a legal standard of adequate disclosure, and indeed, "the reality of any discernible custom reflecting a professional consensus on communication of option and risk information is open to serious doubt." The notion that patients should have a basic right to know all material information relevant to their condition and care is self evident today; yet the Canterbury v Spencecase, decided on only 30 years ago, was a turning point in the legal standard of medical care.Law, Professionalism, and the Business of MedicineThe evolution of law has had particularly important implications in the context of the business of medicine and its interaction with antitrust law and principles. The most dramatic example of this evolution has been the elimination of the "learned professions" exemption from antitrust law in the case of anticompetitive conduct by professional societies, and there are others, as well. In the area of antitrust liability, many examples have been cited regarding the intervention by Congress and US federal regulatory agencies that have intervened to soften the blow of adverse court rulings,but the changes wrought by these doctrinal shifts in the law are nonetheless real and of enormous consequence.To understand how changes in antitrust law have transformed medicine as a profession, it is necessary to review the theoretical basis on which this body of law rests. For more than a century, US law has sought to restrain monopolistic practices and anticompetitive conduct that unreasonably impair the workings of a free market. The basic assumptions on which antitrust law is built are, first, that a healthy and dynamic economy depends on the ability of informed consumers to select among competitors on the basis of price and quality; and second, that it is the role of law to protect and enable such a market environment.Given the conceptual basis on which the law rests, it is fairly easy to understand why anticompetitive practices, such as price fixing or unfairly eliminating competitors from the market, would be viewed as legally anathema.Certain types of anticompetitive conduct, particularly price fixing, are considered so inherently unlawful that courts have developed what is known as a per se ruleto enjoin such conduct. The per se rule permits no defenses when such practices are proved by an injured plaintiff. Other forms of anticompetitive practices, such as conduct aimed at preventing competitors from entering a market and competing for business, tend to be judged under a less onerous legal standard known as the rule-of-reasontest. This legal standard permits a defendant, once a prima facie case is made out, to demonstrate a legal basis for his anticompetitive behavior, such as promotion of health care quality. The rule of reason test does not insulate a defendant from anticompetitive charges, but it makes litigation far more difficult.Despite the relative orthodoxy of antitrust law, courts and regulators historically recognized 2 important exceptions when evaluating claims of anticompetitive conduct. The first was the state action doctrine. Under this doctrine, anticompetitive private conduct would be considered legally permissible if sanctioned by government. Over the years, courts became stricter about the conditions that would need to be present before state action would be recognized as a defense and began to insist on not merely passive government approval but also active governmental oversight and regulation.Indeed, it was the application of this stricter state action test when applied to hospital medical staff decisions, that in great part changed legal standards applicable to hospital peer review.The second exception that came under fire was the learned professions exemption. This exemption essentially removed the professions (and not only medicine) from the comparison shopping conceptual framework that underlies antitrust law. The learned professions exemption was predicated on the belief that professional services were not susceptible to the type of transparency, knowledge, and comparison that underlies consumers' ability to shop comparatively, and that the worth of professional services could be determined only by professionals themselves. The exemption gave professionalism a quality of opacity that effectively removed professional services from antitrust theory. As a result, when physicians banded together through medical societies, as they did through most of the 20th century, to set nonnegotiable fees for insurers through fee schedules, this blatant act of price fixing was viewed as exempt from antitrust principles.Medical Price Fixing.That the learned profession exemption for physicians was about to come to a crashing end became evident in the 1975 case Goldfarb v Virginia State Barin which the US Supreme Court rejected application of the exemption to efforts by legal societies to ban price advertising on professional and ethical grounds. in Goldfarb v Virginia State Bar,the US Supreme Court left the door open to a rule-of-reason defense by acknowledging that a professional fee schedule could be defended through reasonable evidence showing a relationship between the schedule and quality, ethical norms, or public service considerations. But when the test of the legality of physician fee schedules finally came, the per se test was decisively applied.Beyond the Goldfarb v Virginia State Bardecision, the context surrounding the seminal 1982 US Supreme Court case, Arizona v Maricopa County Medical Society,which struck down the use of physician-set fee schedules and ended the learned professions exemption, is important. During the 1970s, concerns over high medical fees mounted as efforts by the federal government to regulate the cost of health care through health planning, the establishment of health maintenance organizations, and public insurance cost containment efforts failed.Most notably in this regard perhaps was the introduction of Medicare peer review in both a health care quality and utilization management context, although its impact on cost was minimal. Furthermore, studies by leading health services researchers, such as John Wennberg, began to demonstrate the disjuncture between medical care expenditures and health outcomes, further suggesting that the quality justification for high costs was shaky. A third pivotal development, although not well recognized at the time, came with enactment of the Employee Retirement Income Security Act,which freed employee-sponsored health benefit plans from state law, including provider-friendly state insurance laws in the case of self-insured employer-sponsored health plans.Given the basic and underlying US preference for open markets, the net effect of these 3 enormous developments—the failure of government efforts to actively regulate costs, the failure of health services research to find a nexus between expenditures and outcomes, and enactment of a law whose ultimate impact was to deregulate the purchase of private group health insurance—paved the way for Arizona v Maricopa County Medical Society.At issue in Maricopa County was the maximum insurance fee schedules developed by 2 Arizona County Medical Foundations. The question that went to the US Supreme Court was the legal question left open by Goldfarb v Virginia State Bar, that is, whether medical professional societies should be able to defend otherwise blatant price fixing under a rule of reason analysis.In finally putting the learned professions exemption to bed, the US Supreme Court rejected the notion that price-setting by loosely organized private health care competitors could be justified on the basis of the learned profession exemption: " The anticompetitive potential inherent in all price fixing agreements justifies their facial invalidation even if procompetitive justifications are offered for some." The Court then went on to define the conditions under which horizontal agreements among competitors could be considered legal:The [Medical] foundations are not analogous to partnerships or other joint arrangements in which persons who would otherwise be competitors pool their capital and share the risks of loss as well as the opportunities for profit. In such joint ventures the partnership is regarded as a single firm competing with other sellers in the market. The agreement under attack is an agreement among hundreds of competing doctors concerning the price at which each will offer his own services to a substantial number of consumers. . . . If a clinic offered complete medical coverage for a flat fee, the cooperating doctors would have the type of partnership arrangement in which a price fixing agreement among the doctors would be perfectly proper. But the fee agreements disclosed by the record in this case are among independent competing entrepreneurs. They fit squarely into the horizontal price fixing mold.In this concluding paragraph, the US Supreme Court thus set the stage for the transformation of the health care system that the nation has witnessed over the past generation. This transformation has been from the sale of "piecework" medical care to the public by thousands of small competing businesses operating under loosely organized confederations or guilds into a system in which health care is bought in large blocs by self-insured employee health benefit plans, private health insurers, and government agencies which then sell their own product of health care coverge. As far as antitrust law is concerned, physicians have been effectively transformed from a learned profession exemption that operates outside of the market to suppliers of raw materials to larger concerns, in this case health plans and insurers. This re-envisioning of the business of medical care makes it similar to the business of selling wholesale rubber and steel to the automobile industry.In recent years, standards adopted by the US Department of Justice have given health professional organizations greater latitude to bargain over price through provider networks. But the standards by no means restore the exemption. As a result, to focus on this increased latitude would miss the extent to which Arizona v Maricopa County Medical Societyand the events that surrounded the decision itself fundamentally transformed the business of medical care.In this regard, the other case worth considering is the 1985 decision in Kartell v Blue Shield of Massachusetts, Inc.This decision essentially solidified the power of health insurers over physicians by severing the legal link for antitrust purposes between physicians and their patients. In Kartell v Blue Shield of Massachusetts, Inc, a federal appeals court upheld the right of an insurer to demand price discounts as a condition of network participation. The decision, written by Judge Breyer, who is now a US Supreme Court Justice, is viewed as the seminal statement on the power of health insurers to control physicians' access to the market of insured patients through price setting.Ironically, the purchaser whose demands for discounts were challenged in Kartellwas Massachusetts Blue Shield, Inc, which had enjoyed a historically close relationship with physicians. The company demanded an end to the practice of balance billing and adherence to the company's fee schedule as a maximum price (ironically, the very same concept advanced by the medical societies in Arizona v Maricopa County Medical Society). But in Kartell v Blue Shield of Massachusetts, Inc,physicians argued that such conduct was monopolistic, interfered with their right to bargain with patients, and unlawfully prohibited them from supplementing health insurance fees with higher payments for quality purposes. The court rejected these assertions in favor of the power of large integrated service purchasers to effectively set the rules of sale of medical care to the public, thereby paving the way for the growth of the dominant form of network-based health insurance arrangements that exist today and that curtail pricing discretion by participation physicians.In summary, the net effect of this doctrinal shift in antitrust law, as embodied in the Arizona v Maricopa County Medical Societyand Kartell v Blue Shield of Massachusetts, Incdecisions, was a virtual sea change in how medical care is organized, priced, bought, and sold. Today, almost no person with health insurance is a member of a health plan that leaves participating physicians free to set their own prices. To the extent that physicians can continue to find "cash and carry" markets in which consumers purchase medical care on physicians' terms and outside the scope of an insurance agreement, price controls continue to remain with physicians. But of course, the number of Americans who fit this economic profile is astonishingly small: most physicians face the same competitive market reality that confronts any supplier of raw goods and services.Staff Privileges.The consequences of applying a more rigorous state action test to the medical profession were shown in Patrick v Burget,in which the Court stripped loosely regulated hospital peer review committees of their antitrust immunity. The decision of Patrick v Burgetinvolved efforts by members of a surgical clinic in Astoria, Oregon, to strip privileges from a former member, who became a competitor. A partner in the clinic filed charges of substandard care by the plaintiff with the hospital's medical staff, which, in turn, reported the incident to the Oregon Board of Medical Examiners. The subcommittee that investigated the incident was chaired by another partner of the clinic. On issuance of a letter of reprimand by the board of medical examiners, the hospital staff terminated the member's privileges.The plaintiff, Dr Patrick filed a restraint of trade lawsuit against the clinic, which alleged a conspiracy to reduce competition through manipulation of hospital peer review proceedings on the basis of a sham quality of care claim. The jury ruled in favor of Patrick, and the court awarded treble damages amounting to several million dollars. This award was reversed on appeal on the ground that hospital peer review fell within the state action exemption from antitrust liability. The appeals court based this ruling on a determination that Oregon Board of Medical Examiners encouraged and actively supervised hospital peer review.In reversing the appeals court's decision, the US Supreme Court reiterated the high standards against which the state action doctrine are to be measured: "The mere presence of some state involvement or monitoring does not suffice. . . . [A]ctive supervision . . . requires that state officials have and exercise power to review particular anticompetitive acts of private parties and disapprove those that fail to accord with state policy."The Health Care Quality Improvement Act of 1986 (HCQIA),which followed on the heels of the jury verdict in Patrick v Burgetand while the appeal was pending, was designed to both create a shield for the type of antitrust liability created by an unregulated peer review process, while simultaneously ensuring the type of active state intervention identified by the US Supreme Court as essential to any decision to sanction private anticompetitive conduct in the name of state regulation. The HCQIA encourages peer review through this shield against liability for money damages, while simultaneously guaranteeing individuals who are denied privileges the right to fair process and external review of a final adverse decision. In this regard, Patrick v Burgetand the HCQIA offer yet another example of how major legal changes in the relationship between law and the medical profession can flow from judicial decisions, in this case, a doctrinal shift in how the state action exception is interpreted and applied in antitrust actions involving medical staff privileges, and how such a shift can in turn lead to a softening, but not a reversal, of the law in a legislative or regulatory forum, where the law is subject to broader policy considerations and greater political accountability.Finally, while it is true that antitrust doctrine demands scrutiny of all forms of anticompetitive conduct, the rule-of-reason test that is applied in medical staff privileges cases gives the medical profession far more latitude than they enjoy where the object of the scrutiny is price fixing. Here, the courts tend to be far more deferential to professional judgment related to health care quality and societal responsibility, even where the private conduct is not actively supervised by the government. No case better illustrates this than Wilk v American Medical Association.In Wilk v American Medical Association, the US Court of Appeals upheld a jury decision in favor of the American Medical Association in a lawsuit filed to stop the organization from attempting to foment a national boycott of chiropractic care. According to the opinion in this case, the American Medical Association Committee on Quackery, which was active until 1974, declared chiropractors to be an "unscientific cult whose practitioners lack the necessary training and background to diagnose and treat human disease."The question on appeal was whether once the elements of a group boycott could be made out, the per se doctrine applied and a defense based on the rule of reason was foreclosed. Reviewing the decisions in Goldfarb v Virginia State Barand Arizona v Maricopa County Medical Society, the court noted that the legal principles that evolved in modern antitrust jurisprudence resulted in a "narrowness of the range of the preserved opportunity for differential treatment of professions and nonprofessions under the Sherman Act."At the same time, the court concluded that while price fixing was no longer defensible, antitrust law still permitted a rule-of-reason defense in those cases in which a professional medical organization attempted to defend a boycott on ethical grounds. To be sure, the American Medical Association could have lost the case on its merits; that is, it is possible that a jury could have found that a defendant was unable to defend real concerns on objectively reasonable grounds, that such concerns were not the dominant motivating factor behind the defendant's conduct, or that there were other less economically intrusive means of achieving the defendant's desired results. But the decision to allow the defense at all was critical to the application of antitrust practice and theory to the practice of medicine.CONCLUSIONThe material presented in this article suggests several conclusions to be drawn. First, the legal framework in which medicine is practiced has changed in significant ways, particularly within the past 50 years, that affect the basic roles and obligations of physicians, their accountability for the quality of the health care they furnish, and their business practices. Physicians are expected not to discriminate on the basis of race, national origin, or disability in the selection of patients or the provision of medical care; to participate in emergency care when part of corporate hospital enterprises; to conform their practices to a nationally based professional standard of care; to price their services competitively; and to not use illegal tactics to eliminate the competition. All of these expectations are radical departures from those that prevailed even 2 generations ago, and all reflect a larger movement in society toward egalitarianism, accountability, and transparency in professional and business dealings. These changes in the legal framework that binds the medical profession are not the result of outlier conduct on the part of individual judges or isolated groups of lawmakers or regulators. They are the end result of enormous social currents that affect the position of physicians in society.Second, advances in medicine itself have accounted for much of this change in the legal framework. As the professional liability cases illustrate, the evolution in the practice of medicine rendered many longstanding legal concepts, such as the locality rule became outmoded or irrelevant, most notably the concept that the subjective judgment of 1 or 2 local physicians could effectively set the standard of care by which the profession would be held legally accountable. Similarly, advances in health services research allowed experts (regulators, lawmakers and judges) to see the apparent disconnect between the expenditure of costly medical resources and the outcome of care, a finding that paved the way for the transformation of the law of competition in a medical context. In perhaps the greatest testament of the power of medical advances to change the law, hospitals and their medical staff are now held to an absolute duty of care under a federal law that does not merely compel stabilizing treatment in medical emergencies but stabilizing treatment even in situations considered futile by the profession itself. A greater testament to the value that society places on life—and to the extent to which it is willing to regulate medical conduct to preserve it—can hardly be imagined.Third, advances in human and civil rights also account for fundamental changes in the law as it relates to medicine. The Tuskeegee tragedy, in which a group of public health physicians withheld critical information from patients to their grievous detriment, helped lead to a basic reformulation of the law of patient informed consent. The sea change in US society brought about by the civil rights movement over the latter half of the 20th century today has affected the physicians' private practices in ways that could not have been imagined only a few generations ago.Do substantial revisions in the legal framework that binds medicine so as to reflect evolving social and ethical beliefs mean that the law no longer holds the medical profession in esteem? Certainly not. The perch on which organized medicine rests may not be quite as high as it once was, but the power of medicine to command a rethinking of legal doctrine remains profound, particularly when evidence is available to show that the law has pulled too far away from the ideals of the profession. The antitrust cases provide ample evidence of this willingness on the part of lawmakers to mitigate the impact of shifts in legal doctrine that are viewed as a fundamental threat to professionalism. 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TI - The Impact of United States Law on Medicine as a Profession
JF - JAMA
DO - 10.1001/jama.289.12.1546
DA - 2003-03-26
UR - https://www.deepdyve.com/lp/american-medical-association/the-impact-of-united-states-law-on-medicine-as-a-profession-PlTAKQmMSj
SP - 1546
EP - 1556
VL - 289
IS - 12
DP - DeepDyve
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