American Journal of Law & Medicine

Redefining quality by reassigning responsibility. (Quality of Care and Health Reform: Complementary or Conflicting)

I. INTRODUCTION

Implicit in any discussion of quality in health care are ideas about responsibility: who is responsible to define quality, who is responsible to deliver it, and who is responsible when the quality of care is unsatisfactory. The thesis of this article is that due to economics, ethics, and law, we have placed these responsibilities almost exclusively on physicians, but that powerful economic changes now require a reallocation of the responsibilities of providers, patients, and payers in defining and delivering quality in health care.

In the past half-century an extraordinarily generous, uncritical reimbursement system has empowered physicians to define and deliver quality that is interventionist and highly technological. Longstanding ethical precepts hold that physicians are responsible for their patients, and modern economic arrangements have encouraged physicians to focus on their patients' welfare, virtually to the exclusion of costs or other competing considerations. Fueled by these economic and ethical factors, in turn, tort law has empowered the medical profession to define quality for legal purposes--to set the standard of care--and has required physicians to deliver a roughly uniform standard to all patients, essentially regardless of cost.

Recent economic changes now force reconsideration of this pattern. Arguably, physicians' mandate to deliver a lavish, highly interventionist quality of care is no longer economically sustainable, medically justifiable, ethically acceptable, or legally defensible. As third parties exert greater control over strained resources, it is no longer possible or plausible for physicians to command resources with just a signature. And as people who have been excluded from the health care system gain entry to it, defining quality strictly in terms of an individual patient's welfare, without regard to competing concerns or overall resource constraints, is no longer acceptable. A credible notion of quality in health care requires a more explicit recognition of economic limits and a more reasonable allocation of ethical, medical, and legal responsibilities. In the forefront of these changes, patients, who are not only the recipients but also the ultimate payers of care, must now participate actively in making the cost-value tradeoffs inherent in any new definition of quality.

II. THE QUALITY OF AFFLUENCE: MEDICAL, ETHICAL, LEGAL

IMPLICATIONS FOR PHYSICIANS

The history of health care economics in the United States is amply chronicled.(1) Here we need only a broad outline to illustrate how the lavish health care funding of the past half-century--just prior to recent years' panicky cost containment--shaped our ethical, medical, and legal ideas about physicians' responsibilities. The next section examines how the current economic reorganization of health care requires a reevaluation of those values.

Prior to the mid-1900s, physicians had relatively little to offer patients other than attentive observation, dietary recommendations, and a limited array of medications and surgical procedures. Public health and sanitation measures accounted for most of the important improvements in morbidity and mortality.(2) Payment for services was generally out-of-pocket and seldom posed an economic crisis for patients. As insurance for hospitalization and later for physician services emerged in the 1930s, it quickly became a major workplace benefit, particularly during World War II as wage and price freezes precluded most other ways of increasing employees' compensation.(3) Thereafter, tax exemptions for employer-provided insurance, plus a rising general inflation that put higher wages into higher tax brackets, encouraged increasingly comprehensive health benefits in the work place. After all, a tax-free penny saved is worth considerably more than a taxable penny earned.

Insurance coverage was generous and uncritical. Reimbursement was awarded retrospectively, paying a separate fee for each service at rates generally set by providers themselves. It rewarded providers who charged higher fees, performed more services, and unbundled their care into as many separate services as possible.(4) Although insurers had the prerogative to deny payment, they rarely did so. This pattern was virtually set in stone in 1965 as Medicare and Medicaid brought the poor and elderly into the insurance system which, by then, was essentially an Artesian Well of Money.

Patients, many of whom paid little or nothing out-of-pocket, had little reason to care about costs and neither did physicians, who generally were assured of payment from insurers. Insurers simply passed along their increased costs to businesses.(5) Even the uninsured were reasonably well-covered by a system of cost-shifting, in which paying patients were charged enough to cover the indigent. Under such a system, physicians' medical, ethical, and legal responsibilities to define and deliver quality care were heavily shaped by affluence.

A. MEDICAL RESPONSIBILITIES

Medically, the most obvious result was a highly sophisticated brand of care. New technologies, almost always covered by third-party payers as soon as they appeared, were rapidly incorporated into physicians' routines(6)--sometimes even before their best uses or most efficient means of production had been clearly identified.(7)

Accordingly, physicians were economically empowered to define good care with very little outside influence. So long as payers reimbursed nearly everything physicians did, medical routines were largely a function of what physicians believed their patients needed.(8) Other considerations, including alternative uses of resources or even the needs of other patients, had little role except where two patients directly competed for a specific, limited commodity, such as an intensive care bed.(9)

B. ETHICAL RESPONSIBILITIES

The medical profession has long held that physicians are responsible for patients' care. Patients, after all, are vulnerable from illness, infirmity, and ignorance. Surely they should not be expected or even permitted to participate in facturally complex, emotionally upsetting medical decisions. From the Hippocratic corpus through early American Medical Association (AMA) codes of ethics, physicians were instructed to make all medical decisions for their patients, even to withhold information about diagnosis and prognosis except as necessary to induce the patient's cooperation with treatment.(10) The tradition placed heavy responsibilities on physicians and almost none on patients, except to cooperate and perhaps to pay for services.

Recent decades' lavish health care funding has encouraged several further values. First, many physicians and commentators insist that the cost of care should be irrelevant to treatment decisions--that, except where the patient is paying directly out of pocket, it is plainly unethical to consider costs or to compromise care in any way in order to save third parties' money or to defer to societal concerns.(11)

Second, as a corollary, many physicians believe they must ignore competing needs in determining what resources are appropriate for their own patients. If a radiologist believes that his patient will be more comfrotable with a very costly new contrast dye than with a vastly cheaper but slightly riskier alternative, then he may feel ethically bound to use the superior dye even if it means that other patients are denied resources that are equally or more important to their care. Those people are others' concern; this physician is to be dedicated solely to the welfare of his own patients.(12)

A third corollary stems from medicine's longstanding belief that physicians should deliver care without regard to patients' social standing. Retribution is the law's business, and it is not the physician's place to punish the criminal by refusing to treat his illness or bind his wounds. More recently, ample insurance has helped expand this ethical tenet to mean that physicians should provide a uniform quality--including quantity--of care to all patients, regardless of their economic standing. Cost-shifting rendered such equality easy and virtually mandatory. So long as money flowed from an Artesian Well, surely a physician could not justify skimping on a patient simply because he is poor.

Fourth, Artesian financing has also encouraged physicians to manage medical uncertainties with an ethic of interventionism: the greater sin is to do too little than to do too much.(13) Morally, this norm is not intrinsically obvious. A leaner economic scene might well have instructed physicians to regard wastefulness and excess as the greater sins.

Fifth, traditional professional tenets of altruism and self-effacement have been amplified by generous funding. Medicine, like any profession, has a commitment to serve people in need, even at a cost to the physician's own welfare.(14) Therefore, conflicts of interest should be avoided if possible, and ordinarily resolved in favor of the patient if inevitable. The spacious economics of American health care rendered conflicts of interest a remarkably minor problem. Fee-for-service medicine does provide profit for needless interventions, but the remedy has been fairly simple: refrain from such vulgar exploitation. Otherwise, physicians' and patients' interests largely converged as physicians felt free to order whatever might benefit the patient, nearly always assured of payment.(15) As discussed below, a more constrained financial system now renders conflicts of interest considerably more difficult to avoid, and traditional simplistic prohibitions less plausible to uphold.

C. LEGAL RESPONSIBILITIES

Legal expectations have paralleled ethical precepts. With some variations for specialty and locality, United States tort law requires physicians to deliver a basically uniform quality of care to every patient, usually regardless of the patient's ability to pay.(16) A physician can ordinarily refuse to accept a patient for any reason, including the patient's poverty. But no patient, once accepted, should receive substandard care for economic reasons. Over the years, this standard has come to include technologies essential to adequate care, and physicians have been expected to take x-rays, order lab tests, or keep patients in the hospital as long as necessary.(17)

Artesian funding rendered this requirement easy to meet. Insurers rarely challenged medical judgment, and hospitals cared for uninsured patients through costshifting. The law's mandates came to match the ethics of affluence: money is basically irrelevant; no competing needs are more important than each physician's own patient; each patient is entitled to the same basic quality of care, regardless whether he can pay for it. Insofar as courts expect physicians to deliver technologies as part of their standard of care, and where those technologies are owned or their use is paid for by other parties, it follows that physicians are expected literally to commandeer other people's money and property on behalf of their patients.(18)

Alongside generous reimbursement and the moral mandates discussed above, these legal expectations have also helped to fuel medicine's highly technological standards of quality. Physicians rapidly adopted emerging technologies, not just because they were paid for and might help patients, but also because they feared being held liable for adverse outcomes resulting from a failure to use them. Since courts generally determine the medical standard of care according to physicians' prevailing practices, such fears can quickly become self-fulfilling prophecies. Widespread adoption of a new technology renders it empirically prevalent and therefore essentially required. But once again, so long as funding was generous and uncritical, the increased technology of care presented little legal problem for physicians. They were both obligated and usually able to deliver whatever resources their patients needed.

Courts also have contributed to the richly technological standard of care via "judge-made insurance." Contract law commonly construes ambiguities against the drafter, and in recent years courts have been increasingly willing to find the terms of health insurance contracts adhesive, contrary to public policy, or even unconscionable.(19) Judges have been willing not only to interpret contracts liberally, but sometimes to bypass them altogether and order coverage for care that is ostensibly excluded under the policy. This occurs particularly when an experimental technology offers the patient's only hope against a life-threatening illness.(20)

In sum, the economics, ethics, and law of medicine have empowered physicians to define quality in medical care and expected them to deliver costly resources to patients, even though these are owned and paid for by others. Quality has meant every intervention of possible benefit, and neither physicians nor patients have been expected to weigh medical benefits against their costs or against alternate uses of the same resources. Patients have been free to reject unwanted interventions, but neither they nor physicians have been expected to include cost-value tradeoffs in the very concept of quality.

III. ECONOMIC CHANGES, NEW CHALLENGES

Thus, in the latter half of the twentieth century a free-flowing economic base rendered medicine almost sacred. Unlike other human needs and activities, where health is concerned, money is no object. Naturally, the cost of health care has soared.(21) The U.S. now spends about a trillion dollars on health care, roughly fourteen percent of the Gross Domestic Product. The problem is not simply that we spend this particular percentage; more fundamentally, we have been unable to stop the escalation.

Cost containment is not new. Serious efforts over the past twenty years have ranged from regulating prices, to limiting the spread of technology, to encouraging healthy living.(22) Yet the inflation rate for health services has consistently outpaced the rest of the economy. And so in the past decade, businesses, governments, and third-party payers have rejected the cost-plus financing that seemed to hold no one accountable for the cost of care. Through a wide array of mechanisms, ranging from managed care and utilization review to expenditure caps and provider incentives, they are desperately trying to limit their expenditures.

These payers now exercise much more control over their money, for instance as insurers negotiate reduced fee schedules and refuse to pay for interventions that they consider to be either medically unnecessary or outside the subscriber's contract. They also affect medical decisions, sometimes directly forbidding the physician to order certain interventions, as by keeping certain costly drugs out of the hospital's pharmacy. Incentive systems are more indirect, leaving physicians in control of medical decisions, but imposing significant financial incentives to trim the level of care. The HMO physician, for example, will find his year-end income substantially affected by the amount of testing, consultation, and hospitalization he authorizes for his patients.(23) Similarly, an independent physician whose patients too frequently overspend their welcome may face "economic credentialing," a loss of privileges to practice at that institution.(24)

The effects are profound. First, physicians can no longer command resources with just a signature on an order sheet or prescription pad. When payers deny coverage for a major medical expenditure, it is much more difficult than in the past to order that intervention anyway. The patient may be unable or unwilling to pay out of pocket, and hospitals are much less willing to absorb the costs of uncompensated care. The physician who orders the treatments anyway may face a significant personal price, financial or professional, for being too generous.

Second, as payers tighten fee schedules and deny payment for medically unnecessary care, resources once available for the uninsured are rapidly disappearing. Cost-shifting is giving way to a "stratified scarcity" in which physicians can no longer assure the same quality of care for the poor as for the well-insured.(25)

Third, because of these factors physicians find themselves no longer in an intimate, didactic relationship with patients. …

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