Patients as consumers: courts, contracts, and the new medical marketplace.

The persistent riddle of health-care policy is how to control the costs while improving the quality of care. The riddle's once-promising answer--managed care--has been politically ravaged, and consumerist solutions are now winning favor. This Article examines the legal condition of the patient-as-consumer in today's health-care market, It finds that insurers bargain with some success for rates for the people they insure. The uninsured, however, must contract to pay whatever a provider charges and then are regularly charged prices that are several times insurers 'prices and providers' actual costs. Perhaps because they do not understand the healthcare market, courts generally enforce these contracts. This Article proposes legal solutions to the plight of the patient-as-consumer and asks what that plight tells us about market solutions to the health-care quandary.

 
TABLE OF CONTENTS 
 
INTRODUCTION: PATIENTS AS CONSUMERS IN A 
NEW MARKETPLACE 
  I. THE MISERABLE MARKET FOR MEDICAL FEES 
     A. Introduction to the Problem of the 
        Medical Marketplace 
     B. Insurers as Purchasers of Health Care 
     C. Shopping for Prices 
        1. The Effects of Illness on the Patient 
           as Consumer 
        2. Shopping for Treatments: Patients in the 
           Hands of Doctors 
        3. Shopping for Doctors 
     D. Doctors' Prices and Doctors' Power 
     E. Hospital Prices 
     F. Summary 
II. JUDICIAL PROTECTION OF THE PATIENT 
    A. Should Courts Protect Patients? 
    B. How Can Courts Protect Patients? The 
       Supervisory Doctrines 
       1. Incomplete Contracts 
       2. Unconscionability 
       3. Fiduciary Duty 
       4. A Larger View of the Supervisory Doctrines 
       5. Determining Reasonable Rates 
CONCLUSION 

[Professionals] may, as in the case of a successful doctor, grow rich; but the meaning of their profession, both for themselves and for the public, is not that they make money but that they make health, or safety, or knowledge, or good government or good law.... [Professions uphold] as the criterion of success the end for which the profession, whatever it may be, is carried on, and [subordinate] the inclination, appetites and ambition of individuals to the rules of an organization which has as its object to promote the performance of function.

--R. H. Tawney

The Acquisitive Society

INTRODUCTION: PATIENTS AS CONSUMERS IN A NEW MARKETPLACE

Patients have always been consumers. (1) Before health insurance was common, they shopped in a market for medical services just as they shopped in a market for toasters and tailors. The fifteen percent of us who lack health insurance still shop that way. Even insured patients shop: they make copayments and have coinsurance; they pay extra for doctors and hospitals outside the insurer's network and for drugs outside the insurer's formulary. (2)