Chapter 4.B.2: Identifying Customary Standards
Supplemental Bibliography
Notes: Geographic Variations in the Standard of Care
Note 1. Locality Rules
For historical discussion of the locality rule, see T. Silver, One Hundred Years of Harmful Error: The Historical Jurisprudence of Medical Malpractice, 1992 Wis. L. Rev. 1193 (arguing that locality originally was a relevant factor but mistakenly was converted into an absolute rule).
Note 2. Geographic Variations and Physician Preferences
For additional research on geographic variations and preference-sensitive care, see David Cutler et al, Physician beliefs and patient preferences: a new look at regional variation in health care spending, 11(1) Am. Econ. J. 192 (2019); John D. Birkmeyer et al, Understanding of regional variation in the use of surgery, 382 Lancet 1121 (2013).
Notes: Practice Variations and Modified Standards of Care
Note 3. Clinical Innovation
For academic perspectives on clinical innovation as it relates to malpractice, see Michelle Oberman, The Sticky Standard of Care, 47(6) Hastings Center Report 25 (2017); Anna Laakmann, When Should Physicians Be Liable for Innovation?, 36 Cardozo L. Rev. 913 (2015); Marshall B. Kapp, Getting Physicians and Patients to Choose Wisely: Does the Law Help or Hurt?, 46 U. Toledo L. Rev. 529 (2015); Michael D. Greenberg, Medical Malpractice and New Devices: Defining an Elusive Standard of Care, 19 Health Matrix 423 (2009); Peter Jacobson, Medical Liability and the Culture of Technology, in Medical Malpractice and the U.S. Health Care System (W. Sage & R. Kersh eds., 2006); Anna Mastroianni, Liability, Regulation and Policy in Surgical Innovation, 16 Health Matrix 351 (2006); Daniel Merenstein, Winners and Losers, 291 JAMA 15 (2004) (describing liability risks associated with use of evidence-based medicine).
Note 4. Excessive Innovation
For a discussion of the innovation feedback loop, see James Gibson, Doctrinal Feedback and (Un)reasonable Care, 94 Va. L. Rev. 1641 (2008).
Note 5. Unorthodox Medicine
For discussion of legal standards applicable to physicians who also practice alternative medicine, see J. Brad Kallmyer, A Chimera in Every Sense: Standard of Care for Physicians Practicing Complementary and Alternative Medicine, 2 Ind. Health L. Rev. 225 (2005); Michael H. Cohen, Complementary and Alternative Medicine: Legal Boundaries and Regulatory Perspectives (1998).
Note 8. Crisis Standards of Care and Public Health Emergencies
For discussion of liability protections during public health emergencies, see National Academies of Medicine, Evolving Crisis Standards of Care and Ongoing Lessons from COVID-19: Proceedings of a Workshop Series (National Academies Press 2022); James G. Hodge, Jennifer L. Piatt & Rebecca Freed, Navigating Legalities in Crisis Standards of Care, 25 J. Health Care L. & Policy 171 (2022); Teneille R. Brown, When the Wrong People Are Immune, 7 J.L. & Biosciences 1 (2020); I. Glenn Cohen, Andrew M. Crespo & Douglas B. White, Potential Legal Liability for Withdrawing or Withholding Ventilators During COVID-19, 323(19) JAMA 1901 (2020); George J. Annas, Standard of Care: In Sickness and in Health and Emergencies, 362 NEJM 2126 (2010); James G. Hodge and Brooke Courtney, Assessing the Legal Standard of Care in Public Health Emergencies, 303(4) JAMA 361 (2010).
Note 9. Financial Considerations
For more information about economic constraints in medical malpractice cases, see Leonard J. Nelson, Helling v. Carey Revisited: Physician Liability in Age of Managed Care, 25 Seattle U. L. Rev. 775 (2002).
Note 10. Algorithms, Artificial Intelligence, and Machine Learning
The question of liability relating to the use of machine learning technology in medicine is rapidly developing. For thoughtful analyses of these problems, see Mindy Nunez Duffourc, Malpractice by the Autonomous AI Physician, 2023 U. Ill. J.L. Tech. & Pol'y 1 (2023); Samuel D. Hodge, Jr., The Medical and Legal Implications of Artificial Intelligence in Health Care - An Area of Unsettled Law, 28 Rich. J.L. & Tech. 405 (2022); Sandra L. J. Johnson, Artificial Intelligence in Health Care: The Challenge of Effective Regulation, 42 J. Legal Med. 75 (2022); Charlotte A. Tschider, Medical Device Artificial Intelligence: The New Tort Frontier, 46 B.Y.U. L. Rev. 1551 (2021); Benny Chan, Applying a Common Enterprise Theory of Liability to Clinical AI Systems. 47 Am. J.L. & Med. 351 (2021); Scott J. Schweikart, Who Will Be Liable for Medical Malpractice in the Future? How the Use of Artificial Intelligence in Medicine Will Shape Medical Tort Law, 22 Minn. J.L. Sci. & Tech. 1 (2021); Frank Griffin, Artificial Intelligence and Liability in Health Care, 31 Health Matrix 65 (2021); I. Glenn Cohen, Informed Consent and Medical Artificial Intelligence: What to Tell the Patient?, 108 Geo. L.J. 1425 (2020); Andrew D. Selbst, Negligence and AI's Human Users, 100 B.U. L. Rev. 1315, 1315–16 (2020); Gary E. Marchant and Lucille M. Tournas, AI Health Care Liability: From Research Trials to Court Trials, 18 J. Health Life Sci. L 25 (2019); Claudia E. Haupt, Artificial Professional Advice, 18 Yale J. Health Pol'y, L. & Ethics 55 (2019).
Supplemental Substantive Materials
This article, and the notes that follow, provide a more extended analysis of how the standard of care might shift in response to economic constraints.
The Malpractice Standard Under Health Care Cost Containment
Mark A. Hall
Law, Medicine & Health Care 347 (1989)
Reprinted with the permission of the American Society of Law, Medicine & Ethics
and the Boston University School of Law.
For decades, medicine has been dominated by a "spare-no-expense" philosophy that fostered an ethic of providing all care that is of any conceivable benefit, regardless of the cost. This extended financial honeymoon has now ended. Sweeping reimbursement reform is limiting payment for health care under both public programs and private insurance. As physicians respond to this emerging cost consciousness in health care by declining to perform procedures once considered necessary, will they be exposed to liability or will legal standards shift to accommodate the new constraints? This dilemma is one of the most important issues that will confront health care tort law throughout the remainder of the century.
The potential conflict between malpractice law and cost containment has received considerable scholarly attention over the past dozen years, particularly following the 1986 California appellate decision in Wickline v. State concerning that state's Medicaid program. The most comprehensive of the recent articles is "Cost Containment and the Standard of Medical Care," 75 Cal. L. Rev. 1719 (1987), by medical philosopher E. Haavi Morreim, Ph.D, one of the leading commentators on the legal and ethical impact of health care cost containment. In addressing the problem of the proper malpractice standard under health care cost containment, I will use Morreim's article as an opportunity to undertake a general critique of this body of scholarship.
The topic of malpractice and cost containment divides broadly into two questions, each with several subparts. The empirical/descriptive question is whether the legal standard will in fact change to accommodate cost-sensitive treatment decisions; the normative issue is whether the standard should change, and, if so, how. It is remarkable how little the various writings agree on these questions, but it is even more remarkable how unclear they are on these basic positions. . . .
Turning first to the descriptive point, Morreim answers with an "emphatic 'no'" the question of whether the law as currently stated will accept a diminution of care in response to financing constraints. I fundamentally disagree. The law is perfectly capable of incorporating cost-sensitive medical decisions within its existing doctrinal framework.
The Breadth of the Existing Standard.
We are all quite familiar with the fact that the touchstone for the medical malpractice standard is the custom that prevails in the profession. What is almost never recognized is the tremendous variation in behavior that current medical custom encompasses. Courts and commentators suppose that medical custom is monolithic, that is, that there is a homogenous national consensus on the appropriate use of any given procedure, what Morreim calls a "unitary standard of care." This supposition could not be further from the truth.
John Wennberg is the most prominent among the medical epidemiologists who have demonstrated phenomenal variations in local practice patterns. Through a technique known as "small area analysis," he and his associates have documented variations among New England communities of six-fold in the rate of tonsillectomies and four-fold in the rate of hysterectomies. The literature is quite large, but it can be summarized as follows: in virtually every instance where researchers have studied medical procedures that involve any significant degree of judgment, they have found large variations in the frequency with which the procedure is employed for similar population groups, often several-fold variations.. . .
If the existing legal standard is as broad as Wennberg's evidence suggests, it can amply accommodate massive cutbacks in care within the tremendous variations in practice patterns that the established custom encompasses. If surgeons in New Haven, Connecticut were to perform only half the coronary bypass operations previously done, they would still be well within the currently accepted, or "customary," range of practice.
This point is nicely illustrated by the facts in Wickline v. State, 192 Cal. App. 3d 1630, 228 Cal. Rptr. 661 (1986). There, the court rejected the patient's argument that she was prematurely discharged, even though her doctors recommended an eight-day extension of her stay but the state Medicaid program authorized only four. The critical evidence seemed to be testimony by "all of the medical witnesses . . . that [the attending physician] was acting within the standards of practice of the medical community in discharging Wickline" on the earlier date. In other words, the existing custom appeared broad enough to allow a range of (at least) four to eight days of extended stay.
Confirmation of this practice pattern variation phenomenon is also suggested by the lack of adverse malpractice experience in HMOs despite the fact that some HMOs use hospitals 40 percent less than the population at large. (Other plausible explanations are that fee-for-service practice patterns are so inflated that this substantial reduction has not affected the quality of care, or that HMOs are more successful at resolving malpractice claims through settlement or arbitration.) While this is a striking variance in use rates, the range in practice patterns that predated HMOs may have been even wider, allowing for consolidation of HMO practice styles at a significantly lower end of the established spectrum. . . .
The Flexibility of the Existing Standard.
Assuming, though, that changes in medical practice styles would contravene the existing legal standard, the inquiry shifts to whether the standard is capable of evolving to accommodate those changes. The obvious argument supporting the likelihood of such an evolution is that the legal standard is shaped by the prevailing custom in the profession. According to this view, the law is inherently self-adjusting: if professional practices shift, so must the standard. Morreim contends with some force, though, that the law relies on custom only in order to enforce higher, not lower, quality of care. Therefore, the law is not capable of a general evolution in the direction of reduced care. Careful reflection reveals a number of weaknesses in this, Morreim's central argument. . . .
Because the custom standard is entirely empirical, it is incorrect to view the law as codifying a specific [treatment regimen]. Plaintiffs may not simply cite to prior authority that a CAT scan is required in particular circumstances; the necessity of an omitted procedure is open for reexamination in each case. . . . .
Morreim and others contend that, in order for medical custom to evolve, at least a "respectable minority" of the profession must engage in the challenged practice, but this requires someone to take the first step. Since the first person to deviate will be exposed to liability, practice patterns will forever remain frozen in place. . . . This argument is flawed by the assumption that the respectable minority rule relies on a mechanical head counting of physicians engaged in the challenged practice. To the contrary, the rule's emphasis is on "respectable," not "minority." Hood v. Phillips, 554 S.W.2d 160, 165 (Tx. 1977) (rejecting an instruction to the jury that creates the impression that "the standard for malpractice is to be determined by a poll of the medical profession"). . . . In other words, it is enough that the profession (or some segment of it) considers the challenged practice "acceptable" in the abstract, regardless of whether any number of the profession actually engages in the practice. Therefore, if physicians respond in a professionally appropriate manner, the law is perfectly capable of incorporating cost constraints when they first present themselves.
The Resource Component of the Law.
Let me now concede error of my own. It is an oversimplification to assert that malpractice law has never confronted the question of resource constraints. . . . A finer reading of malpractice doctrine readily reveals that a well-developed sensitivity to resource constraints exists at many levels within the law.
Recalling hornbook malpractice law, there are three variants of the medical custom standard. . . . [One justification for the strict locality rule was that rural practitioners had much fewer medical resources available to them. Although this standard is now largely abandoned,] about half of the states have opted for a similar locality rule, which groups localities according to similarities in the available medical facilities and resources, still an explicitly resource-sensitive standard. Even the national standard, which is also widely favored, enforces only those medical practices that prevail in "the same or similar circumstances" as the defendant. Recent case law has begun to stress this qualification of the national standard and emphasize its resource-sensitive component. Hall v. Hilbun, 466 So.2d 856, 873 (Miss. 1985) ("[Past case law] has embraced what many call the 'national standard of care.'. . . We have added to [it] a pragmatic addendum by today's recognition that the physician's duty of care must take into consideration the quality and kind of facilities, services, equipment and other resources available."). See Burchfield v. Texarkana Mem. Hosp., 747 S.W.2d 361, 366 (Tex. 1987) (jury charge that defined negligence as "ordinary care . . . under the same or similar circumstances" is sufficient to describe the locality standard "because the means available to the [provider] are part of the pertinent 'circumstances'"). . . .
Morreim responds that the resources the law contemplates are physical facilities and equipment, not financing; moreover, the locality-based rules shape the standard only on a geographic axis. . . . This argument misunderstands the origins of the locality concept and it unreasonably views the law as a wooden and uncompromising social organism. . . . The very history of the locality rule itself belies this view. When the strict locality standard was found wanting, the courts did not hesitate to expand it to the similar locality standard, and when some found even this modification too restrictive, the national standard "in the same or similar circumstances" emerged. . . . Likewise, when the courts are appraised of the necessity for the pervasive new reimbursement limitations, the most likely considered response will be a further evolution of the legal standard.
To summarize, even if one reads existing malpractice law as entirely quality driven, this is so only because the law is a mirror of the medical profession, reflecting its past incentives and preoccupations. Quality is not the sine qua non of malpractice law any more than tort law generally strives for the entire avoidance of accidents. As the health care sector is forced for the first time in half a century to take costs seriously, the law cannot help but also reflect this new, legitimate concern.
The Law Versus Perceptions of the Law
Other scholars have argued further that, even if the law is capable of change, the behavior of juries and physicians is not. If judges develop a sensitivity to medical costs, the most they can do is instruct juries, who are still free to disregard financial limitations out of sympathy for the injured plaintiff. And physicians, well aware of the plaintiff's bias in juries, will continue to resist financial constraints in their day-to-day treatment decisions. In other words, discussion of what the law in principle does or might do is beside the point; what really counts is the medical and lay community's perception of the law. To my mind, this argument supplies the strongest support for the likely intransigence of the "Law in Action" in the face of cost containment.
Addressing first the jury point, plaintiff sympathy undoubtedly will mitigate the effect of judicial recognition of financial costs, but this is true to no greater an extent than is already the case for medical costs. Presently, the malpractice system balances the medical benefits against the medical risks of particular interventions. When a doctor omits a procedure out of concern for its possible side effects, juries unquestionably tend to minimize these theoretical or "statistical" risks in light of the real, "identifiable" harm that befell the plaintiff. Nevertheless, we do not suppose that the legal system entirely ignores medical risk. A variety of jury control devices exist to keep jury discretion within reasonable bounds. Primarily, juries are told that they must decide according to professional custom (or acceptability), so there must be at least a conflict in the expert testimony before juries are able to find for the plaintiff. A cost-sensitive malpractice system will likewise be blemished by a discounting of financial costs, but for similar reasons this will not result in financial costs being wholly ignored.
There are a number of possible responses to the physician perception argument, but the most convincing is that it turns on a wholly empirical assumption about physicians' behavior that has never been adequately verified and that, in fact, is hotly contested. . . . [It is entirely plausible] that financing, not perceived liability, is driving medical decision making, or at least is one of the hands on the steering wheel. If cost containment is successful in reversing financial incentives, liability and reimbursement will no longer be in sync. The resulting behavior is impossible to predict with precision, but it is a good guess that [liability] concerns will not have the same force as before.
Lowering the Standard of Care
To recapitulate, in theory the present law of malpractice contains abundant mechanisms for accommodating the more conservative treatment styles spawned by the new reimbursement systems. The more difficult question is whether the law should do so, and, if so, in what manner. There are two distinct aspects to this normative inquiry: whether the law should allow any decrease in standards, and, if so, what is the best mechanism for introducing economic considerations.
Some legal commentators continue to take the view that cost considerations should play no role in medical decision making, but this naive idealism is not worthy of serious attention. All sensible thought on this question (including Morreim's) agrees that the law must allow some change in physician behavior. As summarized by Patricia Danzon, the leading thinker on the economics of medical malpractice, "if [cost containment] efforts are to succeed in eliminating inefficient practice patterns, they must not be held to the customary norms of traditional fee-for-service medicine." In virtually no other area does the law require that all possible precautions be taken. To require otherwise would be an economic and social absurdity.
The difficult issue, then, is not whether practice patterns should change, but how, and how much. The threat exists that cost containment incentives will be so potent that medical treatment will fall to unacceptably dangerous levels. Without a doubt, the law must continue to guard against poor quality care, but "poor" according to what standard? . . . .
The obvious alternative to measuring directly the social costs and benefits of medical procedures is to rely on the profession's prevailing or accepted practices as the best available proxy. . . . [Randall Bovbjerg (cited in the casebook) first proposed that HMOs be governed by a separate standard of care that judges their physicians by the custom that prevails in other, similarly situated HMOs. Although the standard of care might, as a result, be lowered somewhat, HMO-based custom would still be a reliable guide to acceptable medical care. Resource constraints might make medical custom more suspect than before, but requiring HMO physicians to adhere to the standard of care practiced by other, similarly constrained physicians, would still impose some meaningful measure of competence. Indeed, in some respects, resource-constrained custom would be more reliable as a measure of the true balance of social costs and benefits than custom influenced by inflationary incentives.] . . .
As a result of the open-ended nature of past reimbursement systems, health care consumers and providers have overweighed quality and underweighed costs. Therefore, we have been able to rest easy on the assumption that the market operates to protect patients' interests more than adequately. This set of economic circumstances has changed dramatically; therefore, we have reason to be somewhat less confident in the professionally-derived standards. But our loss in confidence should not be so extreme as to dispense entirely with custom as a relevant guide to the proper trade-off between financial cost and medical benefit. The new cost containment systems, rather than creating market defects, will bring medical markets more in balance by creating some awareness of the costs associated with medical decision making. It is possible, then, that medical custom will better approximate the social optimum than before. (This is not to say that the health care market will work perfectly now. Clearly, significant market defects remain that potentially affect quality determination. But these defects preexisted cost containment and the extent of their impact is an issue for empirical verification.)
Admittedly, this speculation depends on what weight our reimbursement policy places on the cost side of the balance. If cost-saving incentives are set too strong, physicians as a group may cut back too much, but this is a development that social policymakers will need to monitor, as they are now doing. The only sensible way to administer malpractice law is to assume that the background social policy is correctly set in broad outline. Malpractice law cannot serve as the superego of the entire health care system.
Still, some may fear that hospitals and doctors as a group will profiteer on the new payment systems in unforeseen ways at the expense of patients. But this concern is not unique to the new financing systems. As in the past, three strong forces will continue to constrain the health care sector from departing dramatically from what is best for the patient: (1) professional ethics, (2) professional prestige, and (3) competition for patients. In order to distrust professional custom, then, we must implausibly believe that large segments of the profession will respond inappropriately despite the considerable protective incentives and constraints that remain.
I hasten to observe, though, that I do not take a completely pacific view of the health care sector's reaction to the revolution in health care financing. Certainly, some individual providers will stray from the flock and frightful abuses will occur. But so long as these remain largely isolated and disapproved events, a custom-based legal standard will provide sufficient protection.
Notes: Economic Malpractice
1. British Law. It is curious to compare the attitude of British courts, in view of their very lean funding system. British health care spending per capita is about one third of ours. Surprisingly, there is no overt recognition that resources justify a lowered standard. Christopher Newdick, Who Should we Treat? Law, Patients, and Resources in the NHS (1995); John Tingle, The Allocation of Health Care Resources in the National Health Service in England, 2 Ann. Health L. 195 (1993). Perhaps this is due to the fact that resources are similarly constrained throughout the country, so that a lowered standard would not so clearly require variation from established custom. Indeed, it has been argued that Great Britain can afford to spend so much less than we do only because its malpractice law is so lenient. See Robert Schwartz & Andrew Grubb, Why Britain Can't Afford Informed Consent, Hastings Ctr. Rep., Aug. 1985, at 19. It is also worth noting that, on the question presented in the text concerning the standard of care in prisons, a British court reached the opposite result from the American court. Knight v. Home Office, [1990] 3 All E.R. 237 (discussed in Newdick's book at 109).
2. HMO Custom. If cost constraints are taken as relevant to the standard of care, the next question is precisely in what fashion. The idea of a single HMO custom is easy to grasp, but we now see that HMOs come in many shapes and sizes. Should the standard of care vary according to IPA versus group model HMOs, or between doctors paid on salary and doctors who receive incentive payments to contain costs? The Yale Note cited in the main text argues that, "ideally, the standard of care would be variable at the level of the individual health plan," since the available resources are defined by the insurance contract. See also Clark Havighurst, Health Care Choices (1995). How realistic is that? Do HMOs deserve a lower standard of care at all, especially considering how they advertise themselves? Compare how the standard of care for specialists, for instance, is shaped by how providers hold themselves out to the public.
What standard of care should govern indigent, uninsured patients who have no source of payment at all? Helen Burstin, et al., Socioeconomic Status and Risk for Substandard Medical Care, 268 JAMA 2383 (1992), finds that uninsured patients have over twice the odds of suffering a negligent injury, suggesting that doctors are more careless when patients don't pay. In view of this, should the standard of care be lowered even further? Prof. Siliciano supra argues yes because, otherwise, doctors and hospitals will be deterred from taking these patients on as charity cases, leaving them even worse off. Observe that, as discussed in the casebook chapter 4.F, most jurisdictions have abrogated charitable immunity. However, a few states lower the standard to gross negligence for physicians who treat indigent patients for free. See Comment, Statutory Immunity for Volunteer Physicians, 1 Widener L. Symp. J. 425 (1996). Prof. Mehlman argues in contrast that the tension between malpractice law and the need for charity care could be resolved by imposing a mandatory (not just moral) duty to accept charity patients. That way, we wouldn't have to worry about malpractice law being a deterrent. This debate over the proper liability standard for the poor may be largely moot, however, since indigent patients rarely sue. See J. Glasson & D. Orentlicher, Caring for the Poor and Professional Liability, 270 JAMA 1740 (1993). In large part this is because their lower potential damages (owing to their lower expected future earnings) make them less attractive clients for contingency fee lawyers.
For additional insightful discussion of this entire range of issues, see Bernard Friedland, Managed Care and the Expanding Scope of Primary Care Physicians' Duties: A Proposal to Redefine Explicitly the Standard of Care, 26 J. L. Med. & Ethics 100 (1998); A. Haavi Morreim, Holding Health Care Accountable (2001); Leonard J. Nelson, Helling v. Carey Revisited: Physician Liability in Age of Managed Care, 25 Seattle U. L. Rev. 775 (2002); Fine, Dionne Koller. Physician liability and managed care: a philosophical perspective. 19 Ga. St. U. L. Rev. 641-703 (2003).
3. Other Ideas. If courts won't accept cost constraints as relevant to the standard of care under common law, perhaps the same result can be accomplished under contract law. Prof. Clark Havighurst and others argue that health insurance contracts already establish a medical standard of care by specifying what treatments will be reimbursed. As health insurance increasingly takes the shape of an HMO arrangement in which the insurer contracts with a limited group of doctors and hospitals, it becomes convenient to specify that medical liability will be governed by the same standards that determine what is covered by health insurance. See Health Care Choices, supra. So far, this theory has not been put to the test because insurers have not yet implemented these contractual changes. However, at least one court has opened the door by suggesting that, with a proper contract, malpractice cases could be converted into breach of contract actions. See Dukes v. U.S. Healthcare, 57 F. 3d 350 (3d. Cir. 1995)..
4. Admissibility of Evidence of Incentives. As noted in the main text, economic constraints have been used more as a sword by plaintiffs than a shield by defendants, in that plaintiffs' lawyers have attempted to show that a physicians' negligence was influenced by financial incentives from HMOs that reward cost savings. So far, most courts have ruled this type of evidence to be irrelevant to the issue of negligence and potentially inflammatory. Shea vs. Esensten, 622 N.W.2d 130 (Minn. Ct. App. 2001). To the contrary, however, Neade v. Portes, 739 N.E.2d 496 (Ill.2000) ruled that evidence of economic motivation is admissible in a medical malpractice case. See generally Paul R. Sugarman & Valerie A. Yarasbus, Admissibility of Managed Care Financial Incentives in Medical Malpractice Cases, 34 Tort & Ins. L. J. 735 (1999).