Expanding HMO Liability: Ethical, But Not the Point

It’s always been downstate versus Chicago. Rural versus urban. Simple versus sophisticated. Agriculture versus industry. Shawnee National Forest versus the County of Cook.

But in a harbinger of things to come, Illinois is beginning to speak with one voice. On the last day of September, the Illinois Supreme Court allowed patients to sue their HMO. Without dissent or further comment, the court said that a patient whose case had been thrown out by a lower court judge was entitled to a trial — no more, no less.

Many states are not waiting for the federal debate about expanding HMO liability to play out. In Illinois, for instance, it took the sad case of Inga Petrovich to give the issue momentum on the local level.

Petrovich apparently had complained of mouth pain to her physician, who, in 1990, recommended an MRI for evaluation. Her HMO, Share HMO, denied the referral initially. When she was finally tested, nearly a year later, invasive neoplasm was everywhere. Petrovich died last fall.

Marketing as malpractice

Share HMO had advertised itself as, according to the Chicago Tribune, “the source of all your health care needs” and a “good partner in sickness and health.” The Illinois Supreme Court reportedly took this kind of promise into account in its judgment.

So did Illinois legislators, who this year passed reform legislation, broadened appeal processes, and allowed greater access to specialists. In fact, Illinois trial lawyer and medical groups united to support the bill.

This union is as surprising as the Chicago-based American Medical Association’s new (though eviscerated) union, but this too has come to pass. The only thing that did not pass the legislature was the right to sue.

Matter of priorities

And that right may just be on the horizon, for everyone. Another Illinois case (Pegram v. Herdrich) will be heard in front of the U.S. Supreme Court this January. The issue: whether HMOs can be sued for putting cost-containment ahead of patient interests.

It’s not just in the heartland that people are getting fed up. Illinois now joins California, Texas, Georgia, and Missouri in showing how HMOs can experience liability. California HMO members can now sue their plans if they do not “exercise ordinary care” in arranging, delaying, or denying care.

Patients must first appeal their problems through an independent, physician-mediated system. If they disagree with the judgment and suffer “substantial harm” because of an HMO’s actions, they can sue.

Of course, patients without access to managed care — especially the poor and the poorly educated — will have a difficult time counting this “can-sue” right as a victory.

‘Substantial harm’

California’s new HMO bills separate provider liability from plan liability. In California, plans must effect “substantial harm,” and patients must prove it. California’s Department of Corporations will now give way to a new Department of Managed Care.

Medical negligence on the part of a physician is the same as it always has been: ill advised and unfortunate. But making medical decisions on the basis of cost-constraint instead of medical fact and finding is one sure way for physicians to get burned.

The gray area

All of this may seem black and white. Of course patients should have the right to sue HMOs for making medical decisions. Of course doctors should only recommend indicated treatments and not make decisions on the basis of HMO financial incentives that add to the bottom line.

But the truth is gray, not black and white. Not all financial incentives are bad, and not all patient choices are good. The ethical pendulum has swung all the way to patient autonomy as the first, most important, and some would argue the only real principle in medical ethics. That makes no sense, much less a principled argument.

Most people think of autonomy as choice alone. But it’s not. Genuine autonomy is the ability to make an informed choice. It’s the freedom and capacity not to choose, or to delegate choice, or to choose with someone. In medicine, it usually turns on a particular patient in a particular set of circumstances at a particular moment in time.

How it’s defined

Most of us think of ethics as what we should do. For most of us, finding someone’s full wallet on the street while walking with your teenage son is easy: You look up the identification, phone the person, and mail the wallet back. You wouldn’t take anything from it. It’s not yours. Besides, you model good behavior for your son whenever you can.

But how we ought to think about ethics is just a little different. Ethics is really about how we behave when no one is looking — and when no one might ever look. What we say and what patients say in the privacy of an exam room is behavior just between us and them. It’s powerful medicine, that conversation. It’s for physicians to use, and patients to choose, whenever they can. Irrespective of who they can sue.

Patients have been able to sue doctors all century, but now are just gaining the right to sue HMOs, which for practical purposes, have been around for only half a century.

Could it be that the effort to sue HMOs represents not another surge of patient choice come hell or high water, but genuine autonomy? Is the pendulum starting to swing back toward genuine autonomy and fairness to others?

Maybe. I’m not holding my breath. I do think the right to sue HMOs holds some lessons for HMOs and their physicians. After all, physicians have enormous expectations for financial success and job security to be balanced with all of managed care, and with the fundamentals of right and wrong.

Then there’s the reality of the marketplace: Health care is managed care. That seems unlikely to change in the next 5 or 10 years.

Physicians must know that we can weather this time of managed care conflict. The dry land of scientifically solid medicine offers protection against elements of law and economics that are visible at a distance, but cannot engulf us.

Good practice must be its own reward. The business of medicine should be conducted, for the most part, outside of the professional setting.

What matters

HMOs must know that the exercise of autonomy as lawsuit is here to stay. How HMOs behave when patients and physicians are not looking is what matters. Organized, quality-centered health care systems make ethics an organizational focus. They practice what they preach.

Our most popular topics on Managedcaremag.com