The Unintended Consequences of the Repeal of the ERISA Preemption
The Physician Insurer, Third Quarter 1999
A provision in the Employee Retirement and Income Security Act (ERISA) protects managed care organizations and employers from medical malpractice lawsuits, though not from many other forms of litigation. The Association of Trial Lawyers of America and many physicians have together urged Congress to repeal the ERISA preemption and thereby rescue us from the excesses of managed care that have outraged patients, doctors, and politicians alike. Anyone who has witnessed the acrimony between physicians and personal injury lawyers over the past few decades must be surprised by this area of agreement. This alone should lead to speculation that one of the parties doesn’t truly understand the issue. In this case, unfortunately, it is the physicians. Malpractice suits against managed care organizations will aggravate the condition they are meant to cure.
As a doctor, I understand the visceral reaction physicians have against managed care. It is anathema to cede control of medical decisions to persons who are, by definition, unqualified to make them and who understand the issues only insofar as they can be reduced to computer algorithms.
Repeal of the ERISA preemption, however, will not solve this problem. In fact, it will make it worse. If we acknowledge that managed care companies are practicing medicine and therefore must be held accountable for it, they will inevitably respond by further limiting physician independence. After all, if they are to be held responsible for medical decisions, they will be obligated to control them even more tightly—the worst of all possible outcomes. Moreover, if employers can be sued for providing health care benefits, they may simply cease to offer health insurance altogether.
Expanded liability will link physicians and managed care organizations as codefendants in the same malpractice suits. This will only lead to frantic finger pointing and outlandish judgments against all defendants, adding additional layers of cost to an already overburdened health care system. It is difficult to understand how patients will be better served by drawing managed care organizations more fully into the health care decision making process or how doctors will be better served by making them codefendants with managed care entities in medical malpractice lawsuits.
It is even harder to comprehend the notion that expanded liability is the best way to improve the quality of medical care provided by managed care organizations. Malpractice suits against physicians have had a disastrous effect on the quality of medical practice, demonstrating once again the unique ability of our legal system to produce unintended consequences. Physicians are frequently forced to practice defensive medicine, to avoid high-risk patients or under-served jurisdictions where liability appears excessive, to shun frank discussion of unexpected outcomes to prevent litigation, and to compromise clinical judgment in making difficult decisions that will be subjected to unlimited reevaluation by contingency fee attorneys operating through the microscope of hindsight. Physicians today often regard every patient as a potential plaintiff and the bonds of the once sacred doctor-patient relationship have been severely strained.
The notion that societal control of a function as critical as health care delivery can best be accomplished by a torrent of individual lawsuits is genuinely subversive. As a society, we must reach a basic consensus on what aspects of health care are everyone’s by right and what aspects are only privilege. Once that is done, our elected representatives must codify the necessary law. Vigilante lawsuits and ad hominem judgments are no way to control medical care. Absolutely without question, we must assure the quality of medical services in the United States. This must be done by doctors and patients, however, not by contingency fee lawyers and individual judges.
