American Journal of Law & Medicine

Health law 2010: it's not all about the money. (Follow the Money: The Impact of Economic on the Delivery of Health Care)


It would be naive to argue that money isn't the driving force motivating health care delivery in 2010. At nearly 17% of GDP, health care delivery is a large and growing industrial enterprise that is the largest employer in many communities. Save for free clinics, generating revenue is fundamental to every aspect of the delivery system. From insurance reimbursement rates to the cost of purchasing the latest technology, the surest explanation for understanding changes in the health care system and concomitant development of legal doctrine is, indeed, to "follow the money." Determining who controls the money flows usually explains who the dominant players are, and how they are able to organize and change the delivery system. Unquestionably, the most straightforward way to understand how the system functions, where its vulnerabilities lie, and why it is so difficult to institute significant reforms is to identify who controls the money.

On-going debates regarding the provision and financing of health care in the United States evidence the growing importance of health law to patients, physicians, health care administrators, and other stakeholders. Financial considerations, such as medical malpractice and reimbursement rates, continue to dominate health law. Yet there are important aspects of health care where money does not dominate, or is subordinate to other social goals. In fact the future development of health law doctrine depends on integrating the fundamental non-financial issues inherent in the health care enterprise that are too often overlooked given the intense competitive pressures in the industry.

In this paper, we offer a contrarian (and somewhat aspirational) analysis that focuses attention on important areas in health care delivery and health law that do not depend on how the money flows through the system* Increasingly, the emphasis on money obscures some fundamental values of the health care mission that remain essential if the industry is to meet its basic obligations to patients and other stakeholders. Given that the provision of high quality patient care is the core mission of most health care providers, it is astonishing that the overwhelming majority of discourse in the field of health law is dominated by monetary concerns rather than quality of patient care matters.

Thus, the purpose of this paper is to discuss some health law doctrinal issues that are not necessarily dependent on the financial aspects of health care delivery. After a brief discussion of competing values in health care, we will consider the role of developing fiduciary duty legal doctrine as a mechanism to advance the health care mission. Second, we will examine a range of conflicts of interest that do not involve financial conflicts, but are equally important for understanding the social context of health care delivery. Third, we will examine the importance of regulatory reform as an aspect of improving health care delivery. Finally, we will discuss the importance of health law to health care delivery.


While it is popular in health care management programs (including our program) to use the phrase "no margin, no mission" to indicate the need to generate revenue, it does not mean that mission can or should be ignored. True, those of us in academic settings can all too easily extol the health care mission as a nobler calling than the gritty compromises necessary to raise revenue and sustain a complex enterprise--witness the economic struggles of many public, inner city, and rural hospitals. Administrators, especially in the current economic environment, must be cognizant of the financial bottom line.

At the core of the competing values animating health care delivery is whether health care is different from any other market commodity. If it is no different, then basic market rules and attendant legal principles should apply. But if health care is more akin to a public good, then a different set of moral values must be considered* The following two quotations present the polarity of views.

   ... [I]s health care so special? Is it different from education,
   housing, food, and legal assistance? In respect to all of these
   things, we recognize in our society a right whose enjoyment may not
   be made wholly dependent upon the ability to pay. But just as
   surely .... we do not believe that this right entails equality of
   enjoyment, so that whatever diet one person or class of persons
   enjoys must be enjoyed by all. (1)

   Health care is of fundamental moral importance because it protects
   our opportunity to pursue life goals, reduces our pain and
   suffering, prevents premature loss of life, and provides
   information needed to plan our lives.... Because health care is a
   fundamental good, the moral ideals of justice, equality, and
   community require that the health care system be universal,
   comprehensive, and equitable in the sharing of benefits and
   costs. (2)

Professor Fried's observation is representative of the view that health care is just another commodity and is therefore all about the money. Scarce resources force constraints that the market, rather than the government, is best at allocating. The market will drive the inevitable tradeoffs between the desirability of providing care to uninsured patients and the ability of governmental entities to fund that care. Since health care is no different than any other market commodity, economic efficiency (i.e., maximizing social welfare) should guide resource allocation decisions.

In contrast, Professors Brock and Daniels take the position that health care is imbued with certain moral values that cannot be equated to traditional market goods. In their view, concerns for distributive justice demand that the health care mission supersedes economics. Because health care differs fundamentally from other market commodities, a social justice approach should guide the allocation of resources so that everyone has an opportunity to receive health care services. In this view, nonfinancial values include serving those in need of health care regardless of ability to pay, providing robust community benefits beyond uncompensated care, such as education and health literacy, and providing relief from suffering.

In reality, as noted in the introduction, both views are valid given the modern health care enterprise and need to be balanced against one another. Take, for example, virtually any public hospital in the United States. Not one of them is economically secure, yet their entire existence is premised on serving patients with little or no resources to pay for the care they receive, that is, the facilities exist to meet the broad mission of health care as a fundamental right. But what happens when that mission collides with the economic realities of survival? How can the two polarities exist simultaneously? Often, the result is that the facility closes. In this sense, public policy favors an economic model. Very few states or municipalities are in a position to save failing public hospitals, no matter how important their mission is.

Talking about health care's broader mission will not restore its primacy relative to the financial aspects. Rather, our goal is to remind those of us who write about or are deeply involved in health care that health care's sense of purpose to improve individual and population health remains the central raison d'etre of the health care enterprise. …

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