>
> [the latest from the always-lovely Epstein]
>
> "The Assault on Managed Care: Vicarious Liability, Class Actions
> and the Patient's Bill of Rights"
>
> BY: RICHARD A. EPSTEIN
> University of Chicago Law School
> ALAN O. SYKES
> University of Chicago Law School
>
> Document: Available from the SSRN Electronic Paper Collection:
> http://papers.ssrn.com/paper.taf?abstract_id=253328
>
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> http://www.law.uchicago.edu/Publications/Working/
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>
> Paper ID: U Chicago Law & Economics, Olin Working Paper No. 112
> Date: December 2000
>
> Contact: RICHARD A. EPSTEIN
> Email: Mailto:repstein at midway.uchicago.edu
> Postal: University of Chicago Law School
> 1111 E. 60th St.
> Chicago, IL 60637 USA
> Phone: 773-702-9563
> Fax: 773-702-0730
> Co-Auth: ALAN O. SYKES
> Email: Mailto:alan_sykes at law.uchicago.edu
> Postal: University of Chicago Law School
> Frank and Bernice J. Greenberg Professor of Law
> 1111 E. 60th St.
> Chicago, IL 60637 USA
>
> Paper Requests:
> Contact Marjorie Holme, Program Administrator and Discussion
> Paper Coordinator, Olin Law and Economics Program, University of
> Chicago Law School, 1111 E. 60th Street, Chicago, IL 60637.
> Phone:(773)702-0220. Fax:(773)702-0730.
> Mailto:mholme at uchicago.edu
>
> ABSTRACT:
> The current level of public dissatisfaction has engendered a
> long list of proposed reforms that seek to increase the overall
> level of public regulation of Managed Care Organizations (MCOs),
> by limiting the scope of preemption under ERISA, by expanding
> doctrines of vicarious liability and implied agency, by adopting
> a patient's bill of rights, and by exposing them to class
> actions by disappointed plan participants. In response, this
> paper argues that most of these reforms are ill-conceived, in
> the sense that they do not hold any realistic possibility of
> improving the performance of the health care system relative to
> the current set of tort and contract doctrines that are now in
> place. Direct actions against MCOs for example are likely to
> hamper their mission to contain costs. The usual conditions that
> make vicarious liability sensible, for example, are not likely
> to pertain here when physician groups have assets to meet
> anticipated claims against them. And the use of class actions
> runs the serious risk of introducing dubious claims for
> liability based on some broadside allegations of fraud when
> their proper function is restricted to allowing the amalgamation
> of individual claims that would otherwise be too costly to
> pursue on an individual basis. The real problem with MCOs is
> that in conditions of scarcity, the public is unable to
> reconcile its inconsistent demands for low premiums ex ante with
> comprehensive and deep coverage ex post.
>
-- Michael Perelman Economics Department California State University Chico, CA 95929
Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu