American Journal of Law & Medicine

Strains in the fiduciary metaphor: divided physician loyalties and obligations in a changing health care system.(Conflicts of Interest in Health Care)

Owen Barfield, the British solicitor and literary scholar, reminds us that many legal concepts have their origin as metaphors and legal fictions.(1) We often fail to see the nature of legal metaphors, Barfield argues, because over time they ossify and we read them literally rather than figuratively.(2) Look closely at changes in law over time, Barfield advises us, to see how effectively metaphor works in law and language.(3) Many legal categories and procedures we now use had their origin in using a metaphor that revealed a new way of looking at a problem or that helped solve a legal problem.(4) Legal metaphors also help us to identify critical limits and strains in adapting to new facts and circumstances.

George Annas has pointed out that our choice of metaphors for medicine can reframe our debates about health policy reform.(5) And Analee and Thomas Beisecker remind us that patient-physician relations have been viewed through many metaphors.(6) These include parent-child relations (paternalism); seller-purchaser transactions (consumerism); teacher-student learning (education); relations among partners or friends (partnership or friendship); or rational parties entering into negotiations or contracts (negotiation or rational contract). Doctors have also been viewed both as priestly healers and engineers.(7)

Health law has drawn on each of these metaphors. The idea that physicians are or should be fiduciaries for their patients, however, is a dominant metaphor in medical ethics and law today and is presumed by much of the legal and ethical analysis of physicians' conflicts of interest.(8)

Nevertheless, the fiduciary metaphor is only helpful up to a point. This Article examines the metaphor of physicians as fiduciaries and asks several questions. How far does the law play out this metaphor in the way it treats doctors? What are the limits in this way of conceiving the patient-doctor relationship? What limitations or modifications on its use may be looming in the future?

The thesis is that although doctors perform fiduciary-like roles and hold themselves out as fiduciaries in their ethical codes, the law holds doctors accountable as fiduciaries only in restricted situations. Moreover, private and public groups often expect doctors to work for parties other than patients, and health policy now focuses on the population rather than individual patients. Given the formidable costs of medical care and the increasing dependence of doctors on organizations that employ and pay for their services, physician loyalty is weakened for patients and strengthened for other parties. These facts suggest that the law may consider the interests of these other groups in the future and that other metaphors may more aptly describe patient-physician relationships. Nonetheless, there is reason to think that the law will continue to address strained physician loyalty within a fiduciary framework. It may impose limits on and stretch the fiduciary metaphor to reconcile obligations of doctors to patients with service to groups and society.

I. THE PHYSICIAN'S AMBIGUOUS STATUS AS A FIDUCIARY

How useful is it to view physicians as fiduciaries? To answer this question let us examine: (1) the legal definition of a fiduciary; (2) the roles physicians perform; (3) the ethical standards the medical profession professes; and (4) the standards to which physicians are legally accountable.

A. WHAT IS A FIDUCIARY?

Austin Scott, the noted scholar of trusts, says that the contemporary idea of a fiduciary is analogous to the concept of stewardship as expressed in the Biblical parable of the unjust steward, in the Gospel according to Saint Luke.(9) The steward squanders his master's funds by paying servants more than they are owed with the expectation that the favor will later be returned to him personally.(10) Saint Luke uses the parable to illustrate divided loyalties and the impossibility of serving both God and Mammon.(11) Austin Scott draws on this parable to explain the fiduciary concept, I believe, because he recognized that it deeply influenced fiduciary law.

The fiduciary concept, so prevalent in American law today, has its origins in the law of trusts and agency." Trustees--through a legal fiction--own property but manage it for beneficiaries. Agents are subject to control by other parties who authorize them to act on their behalf. Both trustees and agents are prohibited from furthering their own interests when performing their work."

Over time, courts made analogies between trustees, agents, and others who performed similar roles and extended legal principles governing trustees and agents to these other relationships. Courts and scholars abstracted from these different examples and spoke of fiduciaries as a class of relationships which resembled each other. Now fiduciary relationships include guardians to wards, lawyers to clients, corporate officers and directors to shareholders, government officials to the public, and financial advisors, brokers, and money managers to clients." In all these relationships, the party who provides service is the fiduciary." But no single word refers to the people on whose behalf the fiduciary acts. Therefore, I have coined the term fiducie to refer to the other party in fiduciary relationships.

The law defines a fiduciary as a person entrusted with power or property to be used for the benefit of another and legally held to the highest standard of conduct.(16) Fiduciaries advise and represent others and manage their affairs. Usually they have specialized knowledge or expertise. Their work requires judgment and discretion. Often the party that the fiduciary serves cannot effectively monitor the fiduciary's performance. The fiduciary relationship is based on dependence, reliance, and trust.(17)

Fiduciaries must be scrupulously honest. With limited exceptions, they must not divulge confidential client information. They may not promote their own interests or those of third parties, although they may receive compensation for their services. Roles, interests, or activities that compromise their loyalty or judgment create a conflict of interest. Such behavior triggers judicial scrutiny and is usually regulated or prohibited. In extending the fiduciary standard from trustees to former business partners Justice Cardozo once said:

Many forms of conduct permissible in a workaday world for those acting at

arm's length, are forbidden to those bound by fiduciary ties. A trustee is held

to something stricter than the morals of the marketplace. Not honesty alone,

but the punctilio of an honor the most sensitive, is then the standard of behavior

.... Only thus has the level of conduct for fiduciaries been kept at a level

higher than that trodden by the crowd."(18)

Anything that compromises the fiduciary's loyalty to the fiducie or the fiduciary's exercise of independent judgment on the fiducie's behalf creates a conflict of interest. There are two main kinds: (1) conflicts stemming from financial and other personal interests; and (2) conflicts stemming from divided loyalties of an actor performing competing roles.(19) Conflicts of interest exist prior to any breach of trust. They signal an increased risk that the fiduciary may not act as expected.

Once conflicts of interest are identified, the law can inquire into the kinds of risks that may ensue, the probability of their occurrence, and the seriousness of their consequences. Because fiduciaries have great discretion, there is always a risk that they may abuse their trust. Thus, the law tries to find ways to hold fiduciaries accountable.

Many relationships require one person to trust or depend on another, but not all are fiduciary relationships. Who decides what kind of relation is a fiduciary one, and on what basis?

Courts and legislatures determine who is a fiduciary, not the individual parties in a relationship. Parties can invoke court supervision by engaging in relations that are traditionally subject to fiduciary law. But individuals cannot simply remove themselves from fiduciary obligations."(20) Using their authority to "do justice," courts can refuse to enforce contracts that eliminate fiduciary obligations. Courts can also apply fiduciary principles to novel transactions and relationships.(21)

Over time, courts have developed the fiduciary concept in several distinct areas of law and extended the metaphor by applying the doctrine to new circumstances that appeared analogous, borrowing rules used in one situation for others.(22) In addition, state and federal legislatures have enacted legislation that imposes fiduciary obligations on certain professionals.(23) The result is a diverse set of rules held together by some broad common principles.

No simple criteria fully explain how courts decide which relationships they will recognize as fiduciary.(24) Courts make the decisions as they resolve individual disputes.(25) The decision is a social and policy choice as well as a legal one. It requires choosing which metaphor to use to view a relationship.

B. THE PHYSICIAN'S ROLE

As clinicians, physicians perform three main kinds of activities: they examine patients and diagnose their medical conditions; they advise patients on health matters and prescribe drugs and treatment; and they perform medical procedures and other medical services. Patients reveal personal information about their physical, social, and psychological conditions so that physicians can help them.

Certain features of patient-physician relations closely resemble classic fiduciary relationships. …

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