Select Page

Health Law
University of Michigan School of Law
Bagley, Nicholas



Three Principles (Warring Commitments)
1. Right v. Commodity (We treat healthcare as both)

Moral Hazard Problem – more risky behavior occurs with insurance. In healthcare, this causes people to demand, request, desire, better care and more elaborate or unnecessary procedures as well as expensive drugs because their co-pay is small. In addition, all decisions are made by a doctor (incentive to order more and get paid more. We want them to provide best care irrespective of cost.) Not sensitive to price, modifies behavior of both parties.

Ethical Commitment to provide treatment irrespective of cost.

Product Uncertainty – patients do not know their needs when going to the doctor and information on both sides is extremely unbalanced. No way try before buy. Trust the salesman.

Supple Conditions – Restrictions on Medical School spots, price & licensing restrictions, etc. lead to cost of medical market to deviate heavily from any other market

Pricing Practices – Subsidies: When someone who is able to pay is charged, some of that money is transferred by the hospital for the care of others who can’t afford to pay or pay for insurance. This would not occur if you were buying, say, a television and you paid more so that other people could also have a television. Also, there is no price competition and lack of transparency.

Extremely expensive and unsustainable (in large part due to cost from moral hazard and supply problems above)

Everyone believes that it is a right, though.

“Adequate minimum care” is a fraud – everyone disagrees on what this is, including patients, doctors, insurers, etc.

Three main issues:
1. We can’t afford to give people the healthcare they want
a. Must ration
2. We can’t really specify adequate minimum care – But, if we do, we have to commit to it (unlikely)
a. Too often fall prey to a sad story
3. Must be conscious of possibility that healthcare might not be that special and if it isn’t, we are doing a disservice by providing rather than the other pressing needs of individuals
a. Link between education and increased healthcare
b. Environmental protections
c. Housing, public health, obesity, tobacco
d. Why not use it to enhance our lives (build parks, cut work week)

2. Professionalism v. Cost & Quality Regulation

Why do we trust doctors?
– They have licensing, schooling, respect in the community, enhance lives, save lives
– We don’t want doctor’s to look over their shoulder at bureaucrats (they get paid by them though)
– Relying on salesman again

Why don’t we trust doctors?
– They make mistakes
– Order wasteful, unnecessary care

3. Individual Autonomy v. Public Health Morals

Incarcerate a person that is a threat to society for mental disorders, required vaccines, civil commitment.

State Control of the Practice of Medicine
In General
Not a free market system. Initially, it was to control quality. There is an outright prohibition on a certain type of contract – no matter how much the patient wants it – and the statute suggests that there is something else besides quality at issue! Shouldn’t what patients want matter?

State v. Miller: Defendant treated people at his home for ailments using electric shock, massage, magnets, and recommended vitamins and nutrients for donations. Convicted on 7 counts of practicing medicine without a license. Even though didn’t claim to be a doctor or formally advertise, or harm patient (he prevented them from seeking care). [Criminal]

Lange-Kessler v. New York: Midwife Constitutional Challenge against Professional Midwifery Practice Act. Studies suggested that home births were just as safe. Argument that it violates 14th amendment rights. Quality/Safety justifications – but also economic protectionism.
– No due process violation (Roe v. Wade did not create a right of choice of hc provider)
– No right to privacy right to direct entry midwifery
– Protecting health and welfare of mothers and infants was a legitimate state interest

Increases costs and pushes people out creating high quality care for those who can afford while often eliminating it for those who cannot. Justifications are real, but a balance must be struck and doctors likely don’t put it in the right place.
See Alternative Medicine, Physician Extenders (currently expanding, more efficient, not as good at diagnosis), other medical professionals without supervision (anesthetist just as efficient with or without)

Licensing Scheme
Balance public health against personal autonomy. They don’t necessarily promote quality, are more about a minimum standard of care. Why don’t we examine quality over the course of a doctor’s lifetime? Should incentivize quality, our licensing scheme does not. Must always look at protecting the profession v. promoting quality.

Modi v. West Virginia Board of Medicine: Foxes guarding the hen house. Boards are made up of professionals who are enforcing norms, not necessarily helping patients. Exorcisms. The harm here was not necessarily to the patient, but to the profession who didn’t want to be associated with a witch doctor. Violations (1) providing treatment that would not be considered acceptable by a reasonable and prudent physician with same specialty under same circumstances (2) providing experimental treatment without obtaining fully informed, written consent, and (3) filing a false claim for insurance reimbursement for unacceptable treatment.

The Duty to Treat at Common Law
Contract of Health Law
At the heart of health law. Contract between patient and physician. Contract with insurance company. An offer and acceptance occurs with treatment. (If Healthcare is a “right,” why a contract)

The “No Duty” Rule
There is NO DUTY unless there is an:
1) Agreement or
a. Physicians are not obligated to provide care to a particular patient unless they have agreed (contracted) to do so
b. BUT, once created, treatment relationship establishes a duty to treat

Hurley v. Edingfield: Travelled to get their family doctor and offered to pay when there was no other procurable doctor in time. Unless there is an active treatment relationship, there is no duty to give emergency care. Still the common law rule. Reasoned that a patients physician’s traditional freedom to select patients remained unaltered by the advent o licensure law, which imposed no obligation on a physician to “practice at all or on other terms than he may choose or accept.” Treatment relationship coincides with “spells of illness”

2) Emergency
a. Oath/Ethical

Creation of Physician/Patient Relationship
When the professional services of a physician are accepted by another person for the purposes of medical or surgical treatment, the relationship is created.

that refused to treat a severly ill infant because he was under the care of another physician who was not a member of the staff. Infant died. Detrimental reliance at the core of the case. Hospital maintains an emergency room which by established custom has been open can properly be held responsible for refusing to treat a patient whose condition worsens as a consequence of time lost pursuing forthcoming treatment.

Hospitals Duty
How can hospitals have a duty to provide emergency care to all who seek it while physicians are under no such obligation? Reliance on hospitals – psychological v. detrimental, Manlove seemed concerned with detrimental reliance – hospitals can still limit their obligation according to capacity, expertise, drive-by status (alerting ambulance not to stop there). We don’t expect doctors to be available at all times, but hospitals with emergency rooms, yes.

No Duty Rule for Physicians
Courts often create legal fictions to create this relationship. See, Hiser, prepaid HMO’s analogy to on-call.

Physicians Common Law Duty to Treat
1) a common law duty to treat emergency patients, regardless of payment, but only in severe emergencies
2) common law and regulatory duties to treat all patients who can pay
3) but no enforceable duty to treat nonemergency or mild emergency patients who cannot pay

Hiser v. Randolph: Courts have resolved this problem by holding that a doctor who is “on call” for a hospital emergency room voluntarily undertakes the hospital’s greater duty of care.
– Physician, who had, by contract between himself and hospital, assented to bylaws, rules and regulations of hospital and accepted payment from hospital to act as emergency room doctor “on call,” was obligated by and had duty under such contract to treat to best of his ability patient suffering from acute hyperglycemia who was admitted to hospital emergency room.”

– While the various doctors in this case indicated that they were of the belief they had the right to refuse to treat an individual under varying circumstances, the obviously intended effect of the bylaws and rules and regulations was to obligate the emergency room doctor “on call” to provide emergency treatment to the best of the doctor’s ability to any emergency patient of the hospital. Under these circumstances, the lack of a consensual physician-patient relationship before a duty to treat can arise has been waived by the signatory doctors.

– We hold on the basis of the record and the issues presented to us that Dr. Randolph was obligated by contract to treat Mrs. Hiser to the best of his ability.

Similar to Hiser, HMO doctors have been held liable since they are designated to provide care
Sets the stage for Emergency Medical Treatment and Active Labor Act